United Kingdom fashion retailers' strategies of internet branding - Dissertation Example

?United Kingdom fashion retailers' strategies of internet branding Introduction The United Kingdom’s fashion industry is one of its most vibrant sectors of its economy. With the introduction of internet, the online fashion retail industry has been able to grow and at the moment it is growing at a rapid pace (SAS and Verdict, 2011). British Fashion Council (2011) has said that the value of online sales of fashion industry has reached up to 4.3 billion pounds in the year 2011. This industry is characterized as having a diverse customer base (consumers have different needs and wants), and brands that are targeting different customer segments. Characteristics of consumers of this industry make it a customer and brand driven market-place. In order for brands to compete successfully in this industry they need to be market driven, meaning that they need to design their unique selling proposition according to the needs and aspirations of the customer segments they want to target (Wol?nbarger, and Gilly, 2001) Diversity of customer preferences presents attractive opportunities to manufacturers and retailers of this industry. Consumer behaviour and preferences have been changing with the passage of time, and today consumers can shop from anywhere (SAS and Verdict, 2012). The marketing and branding strategies adapted by the online fashion retailer play an important role in increasing the sales of the product. Moreover, appropriate online branding strategy reduces the risk of the failure of the product (Laroche, Habibi, Richard, and Sankaranarayanan, 2012). Moreover, it allows organisations to reduce their marketing costs and thus they are able to reach their customers easily and in a cost effective manner. Therefore, the significance of the online branding strategies cannot be ignored in the online fashion retail industry (Hart, Doherty, and Ellis-Chadwick, 2000). In addition to the resilience in this industry, the evolution of internet technology and has changed the outlook of different industries (Kotler and Keller, 2006). It has also changes in the fashion industry of UK. One of the recent innovations is the Mobile Commerce (M-Commerce) which allows people to directly shop through their mobile phones. People do not only use mobile to buy products but it is also used to search information about the products (SAS and Verdict, 2012). Internet technology is progressing and it has empowered customers to shop from online fashion retailers. In this setup customers can undertake a shopping tour whenever they like to. One of the advantages of this kind of fashion retailing is that customers have the luxury to express their needs and wants more accurately. These online retail stores are equipped with the capabilities which enable online shoppers to make the retailers understand what they are looking for. According to Tzokas and Saren (2004) businesses are able to have closer relationships with their customers through their website and online business. Dayal, Landesberg, and Zeisser (2001) said that strong relationship with the customers is important in the success of online business. Moreover Cuthbertson and Bridson (2006) have said that effective marketing campaigns, loyalty programs, and other marketing strategies can be helpful in increasing customer satisfaction level even in the online businesses. Dayal, Landesberg, and Zeisser (2001) have suggested that businesses need to create familiarity, reassurance and intimacy if they want to be successful as an online business. They also said that these factors influence the customer satisfaction level. Therefore, advancement in technology and adaptation of technology by the firms in the fashion industry has been one of the differentiating features of online retail stores as compared to traditional retail stores (Fashion United). Since the fashion industry of UK comprises of diverse customer segments, therefore it is imperative that fashion retailers and manufacturers employ different marketing and branding strategies to reach out to these diverse customer segments. However, in order to successfully employ any marketing and branding strategy it is of utmost importance that the retailers and the manufacturers have a firm understanding of the needs and aspirations of their target markets and how they are going to satisfy these needs and aspirations. The performance of this industry can be classified as exceptional because of the turbulent times (recession in the economy) the economy of the country is facing The British Fashion Council (2011) has claimed that the online retailing is growing at a rapid pace and there are several organisations entering in the online fashion retail industry. Moreover, British Fashion Council (2011) has published that the online sales of fashion retail industry have grown more than 150% over the last five years and its value is 4.3 billion pounds in 2011. Furthermore, it has been expected to increase more in the years to come and according to an estimate, this could reach up to 15 billion pounds in the year 2015 (British Fashion Council, 2011) According to the Office for National Statistics, the fashion industry of UK is growing and as estimated by British Fashion Council, (2011) it would further increase in future. Therefore considering the growth of industry, the firms in the fashion industry can still capitalise on the opportunities prevailing in the market particularly from the growing sales from internet. But it is also important to understand the changing consumer behaviour in order to capitalise on these opportunities (SAS and Verdict, 2012) The following graph shows the forecasting figures of the UK fashion industry and these figures looks lucrative for the firms in the fashion industry (British Fashion Council, 2011) The above graph clearly shows that both the jobs as well as the sales of the industry would grow in the years to come. United Kingdom’s online fashion retailers can further strengthen their relationships with the customers by communicating with them it has been considered as an important factor in the success of online businesses (Dayal, Landesberg, and Zeisser, 2001). De Chernatony and Christodoulides (2004) have suggested organisations need to start their online branding from the very basics. Branding strategy for online businesses would include appropriate selection of tools to increase the trust and loyalty of the customers. Dayal, Landesberg, and Zeisser (2001) have said that online branding is not about designing an attractive logo and website, but it is about building and strengthening relationships with the customers. For a branding strategy to be successful, it is important that all the brand elements are in alignment with each other and compliment the core product of the retailer. The retailer, in order to have a sound branding strategy needs to have strong point of difference (PODs) and point of parity (POPs) between its brand and the rival’s brand (Kevin and Keller, 2006). However selection of appropriate tools to brand is also important for the business to be successful. Globalization has also been one of the major drivers of the online fashion industry. This phenomenon has allowed customers to purchase products or brands that belong to some different regions. In this way, this force has enhanced the customer base of previously national brands and product manufacturers. Fashion retailers have also expanded their reach and now they are targeting consumers around the world (British Fashion Council, 2011). Aims and objectives “The aim of this study is to focus on the branding strategies involved in the fashion retail market and to identify and explore these branding strategies with a special focus on Marks and Spencer and Hennes & Mauritz (H&M)” To achieve this aim, the study will focus on the following objectives: Explore marketing and branding strategies widely practiced in the UK fashion industry. To determine the role of internet branding in the UK fashion industry. To evaluate the success of the branding efforts of online fashion retailers in the virtual market place. To determine how Marks and Spencer and Hennes & Mauritz (H&M) gain success through their internet branding strategies. Literature review The UK fashion industry can be classified as vast as it constitutes around 293, 510 retail outlets. Retailers in order to exploit these needs, wants and aspirations, make use of different marketing and branding strategies. A sound branding and marketing strategy carries immense importance in this new online business environment. Companies or online retailers, who understand the importance of sound marketing and branding strategies, are using marketing and branding concepts that have evolved over the period of time. Retailers have not only used traditional marketing and branding strategies but they have expanded their marketing strategies and have focused on e-branding as well. Creating familiarity, reassurance and intimacy are important for an organisation to be success with their online branding as all these helps in satisfying the customers (Dayal, Landesberg, and Zeisser, 2001). Businesses have emphasised on building relationships and social media marketing has been one of the tools that businesses have used to brand businesses online. Companies have used social media to encourage participation of people and community to bring stronger ties with their customer base. These mentioned programs help companies using them to better understand their customers underlying needs and wants. Having knowledge of the customers actual needs, a company can develop a more relevant and acceptable product offering for the customers. As customers’ needs and wants are continuously becoming more and more complex, this knowledge can be of immense benefit for companies and retailers. Promotional strategies and concepts adopted by UK fashion industry There are different marketing strategies and concepts used by UK fashion industry. Marketing is not just about promoting the product or just about selling the products. Marketing includes modifying the products to meet the needs of the customers, promoting the product through right channel so that the message is conveyed, charging prices that could attract and encourage customers to buy the product and making sure that the product is available easily for customers (Keller and Kotler, 2006) Promotion is one of the key elements of a company’s marketing mix. The means that will be employed by the company to promote its product offering in its marketplace is one of the key strategic decisions surrounding the company’s product offering. The mix of promotional or marketing channels is of immense importance because it makes sure if the marketing message of the company is delivered to the intended audience or not (Van der Heijden, Verhagen, and Creemers, 2003). In this age of information technology, a company has numerous options to choose from when constructing its promotional mix. Amongst these options are: Social media Email marketing Websites telemarketing Blogs, press release online banners search engine marketing Google Adword It is important for firms in the fashion industry to use the right mix of promotional tools so that they can communicate their marketing message to their desired market segment. The choice of promotional tools is heavily dependent on the effectiveness of the tool and the cost of employing a particular tool. It is therefore of immense importance that management spend enough time on identifying the most appropriate channels of communications that can effectively convey the company’s marketing message to its target market (Lim, and Dubinsky, 2004). Social media marketing is unlike any other traditional marketing channel. This marketing channel is based on increasing the traffic on the company’s main website by means of promoting the company’s product offering through social media sites like Facebook, YouTube and Twitter and several others. Firms in the fashion industry are heavily employing these social media websites to promote their new brands and different products and they are regularly maintaining their social media to engage with customers (GSI Commerce, 2011). In addition to social media websites, companies are also employing direct marketing channels like e-mails, mobile phone marketing, online banners and etch. Online companies are also employing below the line marketing activities (BTL activities). This concept has gained popularity in recent years and is considered as being a very effective method for increasing sales volume (Cowart, and Goldsmith, 2007) Digital Marketing is the form of marketing that is employed by online companies. This form of marketing includes tools like digital banners, websites, digital brochures, e-mails, newsletters, blogs, search engine marketing and etch. These marketing tools have evolved ever since the evolution of the internet age. And these are the main marketing tools that are being employed by online retailers to promote their product offering. The choice of these tools is an important aspect of a company’s branding strategy (Keller and Kotler, 2006) Brand management and the fashion industry Ever since the evolution of the internet technology and the resulting emergence of electronic retailing and internet branding, things have dramatically changed for traditional fashion retailers. These retailers, in order to exploit opportunities, have switched to a ‘brick and click’ business model. Brick and Click business model is a business model with which businesses are able to operate as offline (brick) and online (click) business. This initiative was augmented by the use of online promotional tools to further the online branding efforts of retailers. Having received a positive response from customers who found greater value in this mood of transacting, online retail industry is showing a promising prospect (SAS and Verdict, 2011). Looking at the changing behaviour of the consumers, many businesses started adopting the online business model and transformed their brick and mortar business model into pure click or brick and click business models. This business model would allow organisations to capitalise on the opportunities of both offline and online industry. Companies after undertaking necessary re-engineering of their existing business processes started to open their online stores. Industry after industry started moving to online marketplace (Ahn, Ryu, and Han, 2004). Looking at the benefits offered by the online marketplace, customers have started shopping from online stores. There has been an increasing trend of consumers buying clothes online (Goldsmith and Flynn (2004). Cowart and Goldsmith, (2007) in their research also found an increasing trend of consumers shopping online. Building trust is an important factor in the success of online business. This is another objective of an online stores branding strategy that is to establish the credibility of the merchant in the eyes of online customers. The online branding strategy not only has to play a major role in distinguishing a retailer from the cluster of other online retailers but also has to play a major role in strengthening an online retailer customer base. As more and more consumers are moving towards online retailers (British Fashion Council, 2011) several retailers have adapted a brick and click business model. Not only is this move beneficial from the aspect of profitability but also from the aspect of consumer behaviour. Much research has been conducted on the topic of online shopping and consumer behaviour. In their research on this topic, Cowart and Goldsmith (2007) found that online consumers are more brand conscious, quality conscious, impulsive, and brand loyal. These online customers generally purchase from one or few online merchants repeatedly. Other research in this area by Kim and Stoel (2004) concluded that consumers buy online to save their time, search cost and travelling cost. In addition to this features like security, credit cards, fast delivery and money back guarantees are important features that influence the decision of consumers to buy from an online retailer. These researches are a reflection of the promising future of online selling and retailing (Fashion United, 2010) Methodology In order to conduct this research, the researcher will collect information through secondary data sources. All the collected data will be quantitative and qualitative in nature. Using the qualitative data, the researcher will develop case studies on two fashion retailers: Marks and Spencer and H&M. the research has used these two companies from the fashion retail industry as both of these companies are among the top rated brands and they have completely different market position and strategy. Therefore selection of these two companies would allow the researcher to analyse and explore different marketing strategies of the firms in the fashion retail industry. Using these case studies of Marks and Spencer and H&M, the researcher will analyze the trends in branding strategies that have been used by United Kingdom’s mainstream online fashion retailers. The secondary data will be collected using different published journal articles, online sources, books, reviews and different research reports. Once all the data has been collected, the researcher will use it to draft case studies on the companies selected to represent the online fashion retail outlets. A case study approach is used to study the practices some of the most prominent companies in a industry. This approach is restricted to a company on which the case study is about. By using a case study, one gets an in-depth knowledge about the topic on which the case study is about. Since understanding the branding strategies of an online fashion retailer is the main objective of this research, therefore, it is appropriate that a case study approach is utilized as it would give an in-depth knowledge on the area of interest. Opportunities and limitations The research study and its findings will be useful for different analysts, economists, researchers and fashion industry participants. The most important aspect of this research is that it analyzes the strategies that are needed by online retailers to succeed. The foremost limitation of this research study is that the primary data has not been collected by the researcher, and therefore, the researcher would completely be relying on the information that is already available on the topic and is published by other researchers. Reference list Ahn, T., Ryu, S. and Han, I. 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