Trends in Retail Marketing - Essay Example

Trends in Retail Marketing Table of Contents Introduction 3 Retail Marketing 3 The Trends 3 Conclusions 6 References 7 Bibliography 8 Introduction Ithas been rightly observed by the concerned quarters of the business fraternity that the word ‘change’ is the only constant thing in the present world. Thanks to the massive improvements in the field of information technology and communication process, the terms and the tricks of the trade have experienced major transformations altogether. The increasing impacts of globalization have written off the geographical boundaries of the nations and the economy has become truly transnational in nature. With the Internet boom, customer reach has increased greatly as the entire market is within the few clicks of the computer mouse. Also, with such technologies the customers are more highly informed, like never before. Retail Marketing Marketing is the principal undertaking by which links are forged between the customers and the industry. Therefore, it is evident that the marketing industry is constantly changing. Retail marketing has emerged as the need of the hour. The recent trends in marketing suggest that companies have greater accessibility to the end-consumer, eliminating the need for layers of middlemen. Consequently, retail marketing has been one of the fastest growing segments of the marketing industry. Recent developments in retail marketing in the hospitability sector suggest a very interesting trend. It is increasingly evident that many of the designer companies are seeking to penetrate the hospitality sector and to establish hotels in the commercial hubs like Dubai and London. Innovations in the business have led to increasing need for strategic planning for the purpose of effective assessment and monitoring of the business (Phillips & Moutinho, 1999). The Trends Among many of the major trends, it has been observed that the affluent society is becoming more sensitive about choosing the products that they purchase. This is primarily because today’s customers are deluged with a variety of products and a massive amount of information. Customers can easily gain access to information about the products that they are interested in. Also, the number of firms have grown which compete for the same markets in the same industry. With such a wide choice of alternatives, customers tend to look for establishments that would provide the service with the greatest value added at the most reasonable cost. (Escalera, 2007). With such trends prevailing in the industry it was inevitable that the designer companies like Missoni and Armani would attempt entry into the hospitality sector to create optimum value for the affluent society. The Varese based Italian fashion major Missoni was founded by Ottavio Missoni in 1953. The group diversified in tothe hotel industry in the year of 2005 when it signed an agreement with the Rezidor Hotel Group and decided to come up with at least 30 hotels by the year 2012. The first such hotel was established in Scotland with the name Hotel Missoni Edinburgh on 8th June, 2009. The other major designing house based in Milan, Armani, has also decided to move on to the hotel business. The luxurious brand that it is, the group has rightly decided to launch its first hotel at the recently inaugurated Burj Khalifa. The hotel is all set to be opened on 18th March of this year. With this significant move by the Armani group, it can be said that the group also has followed the footsteps of the two other designer brands namely Missoni and Versace (Lee, 2010). The Armani group’s entry into the hotel business in one of the hottest commercial destinations in the world, Dubai, is not intended by the firm to be a single project of its kind. News have it that the Armani Group is all set to invest further in the hospitality industry, with the next hotel of the group coming up at Milano, followed by the Armani Resort at Marrakech and the Armani villas at Marassi in Egypt. In the not-too-distant future, the designer giant is also scheduled to open hotels at Tokyo, London, Shanghai and New York in the future years (Mulligan, 2010). While recent retail marketing trends suggest that the designer brands are diversifying into the hotel businesses, another important trend is emerging regarding the location of such hotels. In the first place, it has become evident that the designers hotels have not been opened at the well acclaimed cities or commercial hubs of the world. Rather, they have been established in places that appear to be performing well amidst the financial recession, and therefore promise great potential. The hotels that are backed up by the designer brands are specifically that of lifestyle categories and the cities like Dubai and Shanghai are best suited for the purpose. In light of the present economic difficulties, when many of the best economies are under the clutches of the economic recession, the purchasing power of these cities and countries have been considerably positive. The luxury market of China, in particular, has been growing phenomenally (Bruning, M., 2007). According to recent news, the designer company, Armani has tied up deals with the Emaar Properties (the developer of the Burj Khalifa) and the next destination of hotels of the Armani Group mostly includes those developed by the Emaar Properties (INSEAD, 2008). The hotel of Armani is expected to have 160 guest rooms along with restaurants, suites and a spa with a total coverage of 40,000 square meters (Farouk, 2009). The essence of such trends of retail marketing is perceived to arise from the need of the industry players to satisfy the end customers. As the competition is tremendous in the present world, especially in the hospitality sector, it is must for the companies that cater to the market to come up with certain product category that would enable the customer to achieve added value with in the same product or the same price. In case of the hospitality industry too, the same is applicable. The designer brands with their hotels can reach the target group of customers in more appropriate and succinct ways. It would diversify their risk of depending solely upon the design industry and also it would enhance earning of revenue by the brands. The groups, with hotels as business units, can have better reach to the target group of customers. The tourists who would visit the places can get the benefit of the accommodation with world class ambience which could further raise the market for the sole products of the design company. Also, the synergies created by the combination of the designer brands with that of the hotel industry would help the hotel sectors too. It would establish the claim that hotel is not just for the compulsory stay of one for few days at a place either because of professional commitments or because of other leisure activities like travelling and touring. The involvement of these big brands would ensure that hotel accommodations are also meant to be judged by style and class. In other words, there are numerous hotels in the cities, but prospective customers have more to look forward to by patronizing the hotels that are backed by the designer brands. It would ensure the claim that the hotels provide not only lodgings, but a total experience of leisure and relaxation. It has been reported that the Armani Hotel that is scheduled to be inaugurated on 18th of March 2010 and whose booking is to commence from the end of January, already have many customers visiting the website to book the tickets online. The other major trend in the hotel industry of the United Kingdom has been the emergence of the town house hotels. The town house hotels are decorated based as per the taste of the owners and essentially has less than sixty rooms. The town house hotels are treated as more like luxury homes rather than hotels (Callan & Fearon, 1997). The hotels also should study in details the trends of the customer behavior and their attitudes. Data mining is an important aspect in this regard as it provides the hotel companies with much required trends (Min, Min & Emam, 2002). Conclusions Traditionally, there are no such major instances of the hotel chains being designed by the fashion designers. Rather, it was believed to be the job of the architects to design hotels. But with brands like Armani and Missoni in to the race, it is now a sort of trend for the fashion designers to get in to the hotel industry (Gulmohar, n.d.). Along with the globalization, the entertainment industry has observed major positive shift and it has definitely contributed towards the boom in the hospitality industry (Barta, n.d.). But the entire journey of the designer brands in to the foray of the hospitality industry is not all free from the uncertainties and challenges. It can be noted that hospitality industry is one of the worst hit because of the undesirable events like that of terrorism. Financial recession has affected almost all of the major economies and there are pink slips all around. This would invariably mean that the customers are willing to pay less and so such a costly destination might not be the best place to check in the present circumstances. The other major threat that these hotels chains might face is that of the lack of expertise. The business of hotels was never the core competency of such fashion designing brands and therefore the chances are high that they are rocked by certain operational issues. It is prudent for the managers of such hotels to initiate the required changes gradually both horizontally as well as vertically. The managers or the responsible executive should ensure that vertical changes include both top-down as well bottom-up changes (Herstein & Mitki, 2008). It is also believed that the trend of the hotel industries will tend to gain increasing importance in the financial as well as non – financial indicators. Along with the financial performance, the hotels are also depending on the quality of service and satisfaction of the customers (Atkinson & Brown, 2001). Yet one cannot deny the recent trade of the retail marketing industry which surely depicts the fact that the fashion brands are increasingly gaining a foothold into the hospitality industry. References Atkinson, H & Brown, J. B., 2001. 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