Asignment title:
Planning and trading in the Fashion Retail Environment
Written report
Within
this report I will be discussing the overall structures and functions of the
various retail formats and how these enable competitiveness, efficiency and
profitability within River Island.
River
Island is a retailer on the UK high street and is also starting to expand
outside of the UK. River Island is a high street retailer and is renowned for
‘stylish, affordable fashion’. Almost all of their products are designed in
house and they pride themselves on having one of the largest design teams on
the high street. They have been around for around 60 years and started off with
the name ‘Chelsea Girl’, then changed it to River Island but they still have a
Chelsea girl collection within the stores. River Island are a chain store and
have 350 stores across the UK and are starting to expand globally. They are a
middle-market high street retailer which is the most common within retail, it
means it is reasonably prices and readily available. River Island is designed
with mass market I mind and is priced accordingly. I will be comparing River
Island to a luxury retailer, for example, a Boutique that sells designer
brands. A luxury retailer will normally have a small team with only around one
or two buyers, one merchandiser and one or two designers, whereas River Island
will have a full buying team with buyers, designers, merchandisers and QA.
Buyers within the luxury market will usually buy from stock ranges and if they
are a large luxury department store, e.g. Harrods they might ask a brand to
offer a particular range only to them, but if they are an independent boutique
they will be buying in small quantities. River Island sells to mass market
whereas a Boutique will be a one off store so has a more limited consumer base,
a boutique will also be more exclusive and will be able to pick and choose what
they want in their store, whereas a middle market retailer like River Island
has a huge team in charge of what goes in store and what is designed to be
sold. Boutiques/ luxury retailers find it hard to manufacture their own brand
ranges due to small volumes they require and will not have the option of the
best factory sources like River Island do. Due to the sheer size of river
island they can almost guarantee their will be suppliers interested in
producing for them and they will want to keep to strict delivery agreements. I
will now be comparing River Island to a discount store, TK Max is a good
example of one of those. They also have a full buying team like River Island
but their quality standards are a lot less than River Island, there is also a
difference in the stores they are a lot more basic than River Islands store
layout. Also discounters are able to place mass volumes and thereby work with
large ‘auditable’ factories. River Island will have new stock and ranges every
season and will constantly churn out new stock, whereas discounter’s don’t
usually have new-season items as they buy end of range/ faulty items. Also
discounters buy stock as seen so it means that when it comes to replenishing
they cannot guarantee the product will be there.
Most
retailers try to be socially and environmentally aware, I will be looking into
River Island and what they do and what they say about being aware of the
environment and people around them. According to River Island’s website this is
what they say- ‘At
River Island there is an underlying and long standing commitment to ethical
trading based upon the belief that business can be both profitable and
responsible. We have always believed that building meaningful long term
relationships with employees, suppliers and communities is good business
practice for us and is what our customers expect of us. This is, and always has
been, the founding principle of our commitment to Corporate Social
Responsibility.’ This is what they say about the environment on
their website- ‘In
all River Island stores, offices and warehouses we are committed to operating
in a way that is mindful of the demand on our planet's limited resources. We
have incorporated the use of renewable energy sources into our operations and
reduced the levels of product packaging. River Island also recycles and uses biodegradable
materials whenever possible.’ River Island also released this
statement in 2013- “Following careful consideration and on-going discussions
with the relevant parties, River Island has reviewed the principles of the
Bangladesh Accord and has signed the agreement. Our objective throughout has
been to establish a long-term framework for improving working conditions in the
countries that we produce in. We feel the Accord is the best vehicle to bring
about significant changes to the region. The final details of the Accord are
still being established and we look forward to working closely with the Accord
members to put the plan into action.” By what their website says
they are very aware of things going on around them, by signing the Bangladesh
Accord it shows the willingness to improve the environment and working
conditions of the people making the clothes in the factories they use. In June
2008 River Island became a member of the ETI (ethical trading initiative) which
is about initiating change and tackling difficulties involving global
manufacturing today. By joining this it shows the companies willingness to make
a difference and shows they are staying true to their ethical policies.
This
is the ETI base code initiatives that they follow:
- Employment
is freely chosen.
- Freedom of association and the right to
collective bargaining are respected.
- Working conditions are safe and hygienic.
- Child labor shall not be used.
- Living wages are paid.
- Working hours are not excessive.
- No discrimination is practiced.
- Regular employment is provided.
- No harsh or inhumane treatment is allowed.
This
code means River Island are following guidelines to be ethical and make sure
their company is not involved in any inhumane and negative practices. The new
5p carrier bag charge has also come into effect in retail, River Island and the
majority of most retailers now charge 5p for a carrier bag to try and get
people to re-use bags, the money also goes to charities which also increases
River Island environmental image to be positive. The charge does effect
retailers though as it is compulsory to all big companies. River Island seems
very environmentally aware and are big on joining schemes and promoting ethical
and environmental issues and policies. River Island also supports lots of
different charities, this is what they say on their website- ‘With over 300
stores, River Island has a place in the hearts’ of communities across the UK
and the world and we’re proud to support the charities and organization’s that
strive to improve these communities. Our approach is to provide funding to
charities to allow them to use their expertise to provide the greatest benefit
possible to those in need. Sometimes there is a clear link with what we do,
sometimes there isn't, but there is always a clear need for what they do. Here
are some of the charities we currently support…’ underneath is a
list of many charity’s here are a few examples of the charities they support-
chickenshed, sightsavers, young epilepsy, British red cross, magic bus and new
life. There is a big range of the types of charities they support lots are
within communities of where their stores are based and are very close to
people’s hearts. They are also big into promoting recycling they have a whole
segment of their site on recycling and promoting the recycling of electrical
goods. As a whole River Island has a very positive image when it comes to being
environmentally friendly and aware of what goes on around them.
Middle
market retailers who produce and design large quantities of goods like River
Island use a critical path to manage their stock and the whole process from
designing the clothes to having them on the shop floor. The critical path is a
sequence of events in a journey from the concept to the garment being on the
shop floor, it is also used to track progress and draw attention to critical
times and events where decisions and things are under pressure to ensure
everything runs smoothly. The critical path is a key management tool. River
Island will use a critical path to make sure all the deadlines and key dates
are met to ensure everything is running smoothly. The path is key to any
retailer especially retailers as large as River Island, if a key approval is
not given to a supplier the factory might lose its place at the printers etc.
they too have other clients and customers so River Island has to be aware of
that to ensure they get their garments finished. There are set timings
allocated for different countries, retailers have to stick to these time frames
to ensure their garments are made on time, these are the timings-
UK 4-6 weeks to exit
Europe 8-10 weeks to exit
China 12-16
weeks to exit
India 12-16
weeks to exit
Bangladesh
12-16 weeks to exit
All
the timings above are also dependent on the speed of the approval process. So
River Island need to make sure they are on the ball with timings and approvals
to ensure everything runs with no problems. Retailers will import their stock
from many different countries depending on the type of garment it is etc. for
example basics that are used every season may be made in china or Bangladesh as
it is a bulk buy and it is not fashion orientated so it is very basic every
season whereas high fashion item such as coats and detailed tops might be made
closer to home. River Island use a range of suppliers in different countries
(from the list above) and also use the UK for some products. River Island will
manage their critical path by making sure everyone is doing what they are meant
to be doing, and by making sure timings and approvals are kept to and not
postponed. In a critical path it shows the activities that must be completed
and is put in a specific order that it needs to be completed in. River Island
will progress through their critical path by meeting deadlines and getting
everything done in time within the time frame, it is all crucial to getting the
stock onto the shop floor by the deadline the path sets. Retailers these days
are under more pressure to deliver more goods to different destinations faster, “retailers need
to know where things are at all times so they can redirect shipments, rebalance
inventories and respond to new demands on the fly”. If there is a
problem with River Islands supply chain it can risk them being unable to get
their products into stores which ultimately will lose them customers. Lots of
things can affect the critical path and supply chain, for example if there is
an air strike it can affect goods from further away countries reaching stores
also things like fires in factories can lose River Island lots of stock which
will affect their critical path, overall retailers need to be on the ball when
things like this happen to be able to resolve and overcome as quickly and
efficiently as possible. Getting products made in Asia can also be problematic
as it is far away and there is less control for the retailer due to the length
of the process, this is why it is not typically suitable for fast fashion,
River Island use countries in Europe such as Turkey for fast fashion. Also social issues can affect stock getting
into stores, for example the recent Paris terror attack can affect sales and
trade as it may put off shoppers from visiting major cities as they may be put
off going due to fear. Also borders will be a lot more controlled and regulated
so may affect how quickly deliveries can reach stores. Critical paths enable
companies such as River Island to have effective time management and to be able
to get stock into stores on time and makes them be able to keep to set time
frames and goals. Previously retailers would only re stock stores with new
merchandise every season whereas these days retailers turn out new stock every
few weeks. Customers have become very demanding and fashions and styles change
constantly. Customers want fashion and quality along with the product being
socially responsible and cost effective, which makes managing the critical path
increasingly harder due to the high demands, and with different time zones and
working hours globally River Island have to be very careful to make sure
everything stay well organized and the critical path is kept within time frames
and is prepared for large demands as well as River Island being socially responsible.
I
will be analyzing how buyers and merchandisers roles affect and differ in
different types of retail organizations. In a middle market high street
retailer (River Island) they will have a full team of buyers, merchandisers,
designers and quality assessors. Whereas a boutique might only have one person
that does everything to do with buying and merchandising due to it only being a
small company/ store. A boutique/ luxury store will find it challenging to make
their own range/brand of goods due to the very small volumes they require and
will find it hard to use the best factories and sources. River Island will have
a full team so all the teams can work together to create a range for River
Island to certain sizing and quality dictated by River Island and what they
think their consumer needs are. In middle market retailers buying and
merchandising only differs when the store format changes, for example a
department store the buying volumes become greatly reduced so, it means so does
the supply base. Retailers who buy from other labels and designers ‘ready-made
goods’ have less control when it comes to the goods and the critical path so a
Boutique who orders in other labels and brands will have a lot less control
than a retailer like River Island who designs their garments will have a lot
more control overall. Discount stores and lower priced retailers such as TK Max
also have a full buying team, but they work in a slightly different way than
the middle market retailers. The buyers usually train as merchandisers so do
both jobs and are always out and looking for stock, the stock they get in is
usually not the latest season stock as they are selling it on discounted, their
quality is not usually very on the ball opposed to other retailers. Supermarkets
are another retailer with a different variation on buyers and merchandisers,
they have a full team just like middle market retailers and their QA standards
are extremely high. Due to the amount they buy/order they can always be quite
in charge of their supply, and their terms and conditions of their company are
extremely tough. Supermarkets prices are low due to the bulk of the orders they
make, and most supermarkets aim for very high mark ups due to the fact clothing
does not make them as much money as other retailers. A majority of retailers
these days work with a team format of buyers and merchandisers and other roles
these are the main roles within any store layout/ model but what they focus on
is dependable on the retailer itself and what their aims are. The part of the
process/ team that is set aside/ignored the most is the QA aspect due to
retailers mainly relying on the buyers and merchandisers within the company as
they are the one that produces the money for the business at the end of the
day. Overall buying and merchandiser roles are crucial to the mass majority of
the retail business. River Island will depend hugely on their team of buyers,
merchandisers, designers and QA to keep everything running smoothly within the
critical path and buying cycle.
(Example)
In
conclusion I have looked at the structures and functions of various retail
formats and how these enable competition, efficiency and profitability within
organization such as River Island. River Island would not be able to function
and make a profit without a successful critical path and buying cycle as well
as a full team of talented buyers, merchandisers, designers and QA to be in
charge of meeting deadlines and approvals. The critical path and their role in
the company is crucial to turning out goods on time and keeping up with trends
and consumer demand. Critical paths also create competition within retailers as
some may have a quicker turnover and production of stock, for example Zara has
a very quick cycle and always has new goods and products so retailers are constantly
in competition with each other and all aim to deliver quick, affordable fashion
for the mass market especially in the high street sector whereas boutiques and
discounters have a different aim in mind. River Island relies on efficiency and
speed to make a good profit and enable sales and turning out new stock on time.
Bibliography-
CBX software. (2015).
Improve Retail Supply Chain Decision Making with Critical Path Management.
Available: http://www.cbxsoftware.com/wp-content/uploads/CBX-White-Paper-Critical-Path-Management.pdf.
Last accessed 29/11/2015.
Jennifer sciff. (2015).
4 ways retailers can improve. Available: http://www.cio.com/article/2932207/supply-chain-management/4-ways-retailers-can-improve-supply-chain-management.html.
Last accessed 29/11/2015.
River Island. (n/a).
Corporate Social Responsibility. Available:
http://www.riverisland.com/inside-river-island/about-us/corporate-social-responsibility.
Last accessed 29/11/2015.
River Island. (n/a).
Recycling. Available: http://www.riverisland.com/inside-river-island/about-us/recycling.
Last accessed 29/11/2015.
River Island. (n/a).
Charity support. Available: http://www.riverisland.com/charity-support. Last
accessed 29/11/2015.
River Island. (n/a).
Ethical trading initiative. Available: http://www.riverisland.com/inside-river-island/about-us/ethical-trading-initiatives.
Last accessed 29/11/2015.
Refer back to my River
Island PEST and SWOT documents
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