Background of UK Childrenswear Sector - Assignment Example

Background of UK Childrenswear Sector: The retail sector’s contribution to the UK economy is raised during the year 2004 with approximate sales of £259.3 billion. Retail accounted for 5.7% of UK. Gross Value and over one third of all retail spending occurred in UK shops. And it is realized that Childrenswear has gained a significant share in retail market. Also the most of the spent is going to value retailer (Over 1 in every 3 pound (GBP)). Though Childrenswear has underperformed in the total clothing market from the last 10 years, recently the industry is experiencing a significant contribution in the total clothing market. According to the statistics, the value sector in 2006 accounted for 35.9% of all UK childrenswear sales, whereas the total clothing market accounted for 23.6% and it is estimated that the growth can increase further. The slow growth rate of Childrenswear in UK can be attributed to the factors like, slower birthrate in UK and the rapid growth of the value market in childrenswear. In spite of the overall sector growth, only the value and low-price fashion retailers have exhibited a continuous growth. Of the nine leading childrenswear retailers in UK, only seven that have a value or low price fashion positioning have gained market share between 2002 and 2007. Under traditional mid market retailers group, the market leaders like Next and Debenhams have only gained the equal share in market. The UK childrenswear market can be considered as the clothing supplier sector for the children under the age of 15 years. This sector produces or promotes the categories like infant clothing, toddler clothing, kids wear- girls clothing boys clothing, sports clothing, night wear etc., The childrenswear have experienced a risen value of 13.1% from 2001 to 2005 worth of PS6.3bn. The price deflation in UK has also influenced the childrenswear market, due to the increasing number of supermarkets and value retailers. However, the retailers like ASDA, Primark, Tesco have concentrated much on childrenswear rather than other non food sales. During this period these giants have concentrated much on pricing which have created a pricing strategic war in the childrenswear sector. In order to sustain and make a competitive position in the market, many other retailers have to follow the leader strategy, by cutting down the prices. Also the recent raise in the UK birth rate have also contributed rise for the baby wear sales In the recent years the UK retail childrenswear market have become a value conscious market trying to observe value through out the supply chain. Also the market is trying to impress the customer through various innovative and technology oriented services like creating email lists etc., rather than regular promotions. The UK market has become more product and brand led allowing the retailers to keep their own labels and to establish their exclusive lines of sales. This has gained a marked success over the supermarkets and value retailers who tend to focus on non branded items. The trend of success led the market to concentrate on the pricing. The childrenswear market is driven by 3 types of consumers. 1. Parents, 2. Children, 3. Non Parents who want to gift. Parents always wants the best and stand out look for their kids, which can hinder the market share of the non innovative product suppliers. People began to look for ‘latest and unique fashion’ for their kids. Though the female population under-15 years age is smaller than the male, the Childrenswear market have experienced a growth for Girls wear than the boys wear. This difference can be attributed to the behavioural and attitudinal differences between consumer behaviour of male and female. Girls do maintain an extensive wardrobe and are also much fashion consciousness, and can make high purchase with the changing trends. The girls wear market in the UK shows some characteristics when divided on the basis of age group: under-nines and above-nines. Under-nines can be classified and targeted for more traditional childrens wear market while the client base being the parents or adults is more safety conscious. Nik Rahimah & Et al., identifies that Television as a media can influence the childrens consumer socialization targeted by childs gender, age and family income. McNeal (1992) as cited in Nik Rahimah & Et al., has identified the primary socialization agents as parents and marketers. Children’s transformation to consumer role can be driven by indoctrination of parents and marketers. McNeal asserts that though the children’s primary consumer attitude is nourished through the parental role, their later purchasing behavior is constantly crafted by the marketers role. The marketer role influences the childrens consumer socialization through childrens exposure to the product, its packaging, pricing, display and advertisements. So, the over nines segment can be driven by the child consumers, who are not only fashion and brand conscious but are also the purchase influencers besides making the own shopping. Even the boys’ wear segment is also affected by the increased fashion and brand awareness. This signifies that children are becoming a target group for active, purposeful consumer activity in themselves and also to influence others. So the retailers are creating a media interest in children to increase the consumption in the area of fashion and the rise of the so-called ‘tweenager’ (Quinion 2001). The UK Childrenswear retailers are also facing issues to manage the Indian exporters who are trying to enter the childrens plus-size market as obesity is increasing among boys and girls. However, according to Giddens 1979, it is not suggestible to conclude that children can freely exercise free will and choice at every turn. Rather the children’s needs and wants also plays an important role in buying. So a buying of school or sports uniform can be categorized as a structured construction rather than a choice. Also as many of the childrenswear retailers are making their products available on internet, it has become much easy for the product comparison even for the children. However, e-retailers have the peculiar challenges that are not seen with the traditional retailers. So they adopt different sourcing and supplier strategies as explained below: Usability / Customer Journey: The retailers have to effectively look for the means and ways to convert the site visitors to sale by efficient presentation of site layout and product displays on the internet. This is different to the store display strategy. Consumer retention strategies: The UK retailers are supposed to facilitate the search and price comparison engines to allow the customers to switch between brands and product categories. Interactive Marketing: The e-retailers are supposed to push the interactive marketing to make the consumer making the wisest deal. Multi channel Integration is another aspect of success for e-retailer. Exploiting New Technologies between suppliers and partners, Cost effective delivery, Prevention of e-crime, E-mail strategies, Secured payments are some of the important areas that are helping for the success of UK retailers. UK Childrenswear retailers: ASDA Stores Ltd. – Though a subsidiary of U.S. retail giant ASDA has a major brand operation in Childrenswear in UK. GAP- in June 2007, the U.S. casual wear group announced plans to launch its first UK concession in House of Fraser stores, as part of the mixed retailers revamped children’s wear business. The new look was to be tested in five stores. CWF, a children’s wear licensing group, is also to open its first concessions at House of Fraser, with brands including Elle, Burberry, DKNY and Timberland. John Lewis - introduced a school-uniform range made from organic cotton in summer 2007. Intended for children aged 3 to 13 years, the range was initially given a trial run in five stores, with prices ranging from $8 to $34. Marks and Spencer PLC – Besides childrenswear the company is engaged in footwear, food, homewares and furniture, financial services - including credit cards, loans, life insurance and pensions etc., Mothercare PLC – This company offers a product line of childrenswear- with is toys, clothing for mothers-to-be, babies and children up to the age of 8 years. The company has global presence through Mothercare-branded stores in Europe, the Middle East, the Far East, Africa and South Asia in addition to its UK stores. Tesco PLC – This is the UK’s largest retail food market. In the year 2002, Tesco entered the clothing sector in UK with the association of U.S clothing company The Cherokee Group, to distribute the Cherokee range of casual wear in the UK. TK Maxx – This company serves the clothing to newborn to 12 years age range. TK Maxx, in an attempt to attract back-to-school shoppers, launched a new line of children’s wear departments - Kids Maxx in summer 2006 through ten of its larger stores. The company positions the children footwear, toys and nursery items besides branded childrens clothing in its departments. References: Childrenswear is Accounting for a Declining Share of the Total UK Clothing Market, viewed 27 November 2008, DUBLIN, Childrenswear Retailers 2007: Research and Markets, viewed 27 November 2008, Writuparna Kakati, Childrens wear market in the UK: An export snapshot, viewed 27 November 2008, http://smetimes.tradeindia.com/smetimes/in-depth/2008/Aug/14/children-wear-market-in-the-uk-an-export-snapshot.html Baily, P., D. Farmer, D. Jessop and D. Jones (2005) Purchasing Principles and Management, London: FTPH Christopher, M. (2005) Logistics and Supply Chain Management, London: FT Prentice Hall Lysons, K; B Farrington (2006) Purchasing and Supply Chain Management, London: FT Prentice Hall Fernie, J. and S. Fernie C. Moore (2004) Principles of Retailing, Oxford: Elsevier Read More