INQUIRY BASED LEARNING

Primark
Table of Contents
Introduction..........................................................................................................................................2
Current Trends in The Retail Industry..............................................................................................2
Research Question.............................................................................................................................5
Analysis of Primark.............................................................................................................................6
SWOT Analysis...............................................................................................................................6
Porter’s Five Forces Analysis........................................................................................................6
Primary Data Analysis....................................................................................................................7
Recommendation..............................................................................................................................11
Conclusion.........................................................................................................................................12
References........................................................................................................................................13
Appendix............................................................................................................................................14
Introduction
Retailing means selling a product to the customers for consumption rather than
resale. In retailing goods are sold in small quantities as per customer’s demand. in
present, verities of platforms are used for the retail transaction such as physical
stores, online stores, e-commerce sites, direct sales and direct mail. The key
products in retail sale involve fashion, food, entertainment, health and beauty, home,
electronic products and general merchandise. Focusing on fashion retailing, this
assignment report attempts to understand the current trends in the retail industry and
analyzing the capability of 'Primark' a leading fashion retail brand in surviving in the
changing industry drifts. Lastly, recommendations will be made on the basis of the
information obtained from primary research.

Current Trends in The Retail Industry

The retail industry needs to consistently change according to the changing behaviour
and expectations of the customers. To survive in the present competitive market, the
retailers are required to understand as well as embrace these changes effectively
(Kunc and Križan, 2018).

Omnichannel Strategy

Von Briel (2018) has stated that the investment in omnichannel retail strategies is
one of the key trends in the retail industry. the customers are connected to several
devices and tend to consult these devices before making a purchase for a seamless
shopping experience. It integrates different sales and communication channels to
combine their strengths and deliver a convenient, and holistic customer experience.
The consumer may find a product on their mobile or search for an item on the web,
or purchase it from a PC or physical store. According to Kunc and Križan (2018)
Omnichannel actually cover all the different trends like artificial intelligence, the
internet of things, virtual reality, robotics (VR) and augmented reality (AR). It enables
retailers to create a convenient shopping experience for offline shops and stores.
Generally, all small and large retailers are moving into online retailing, lately, online
retailers are developing physical stores. Like Amazon's Cashier-less store in the US.
AR and VR are used for feature-rich shopping experiences for online retailers and
offline retailers can facilitate customers to access product information conveniently
(KPMG, 2020). That fashion brands with a strong omnichannel presence enjoy a
retention rate of 89% as compared to 33% for retailers with a weak omnichannel
strategy (Lee et al., 2019).

Purpose to The Forefront

The Covid-19 pandemic has shifted the planning and purpose of businesses from
profit to people. The current situation shows that the customers want the businesses
to be more responsible rather than just earning profit (Businesswire, 2020). The
customer expects retailers to reflect values and care about social issues. The
companies are moved to retool their business model to support the requirements of
government response. The brands are now being judged by their purpose and
actions. According to Edelman (2018), around two-thirds of the consumers across
the worlds decided to buy or boycott a brand solely on the basis of the position of the
brand on political and social issues. The companies that demonstrate the positive
impact on people live has achieved growth by 2.5 times more as compared to the
companies with low perceived impact. over a period of 12 years. Kunc and Križan
(2018) state that the leading retailers are expected to have purposeful brand promise
as well as using that purpose as the guiding principle for decision making and growth
of the company. the top fashion retailers of the world like Burberry, Ralph Lauren,
and Armani have demonstrated their purpose in the present times by retooling their
manufacturing facilities towards producing a range of personal protective equipment
(PPE) for the use of healthcare workers and patients. This generates public goodwill
and long-term customer loyalty.
Awareness of sustainability is increasingly affecting the purchase behaviour of
customers. The fashion industry has identified the shift in customer preferences.
60% of the fashion retail leaders included sustainability in the top strategic objectives
of the business (Rahdari et al., 2020). the businesses are introducing and reflecting
sustainable practices throughout the supply chain.

Artificial Intelligence and Machine Learning

Artificial intelligence is more and more integrating into the daily lives of people. For
some year, the use of AI is increasing in retailing. major retailers are using advanced
analytics to ensure efficient management. according to Bengts (2020), AI in retail
can be seen in customer-facing initiatives, such as virtual assistant and chatbots,
robots are used for inventory management and marketing. The companies are using
AI for anticipating demand and driving sales. Currently, the global market for AI in
retail is worth $9993.6 million and it is estimated to grow to $5,034 million by the end
of 2022 (Vashisht and Mittar, 2019). In the fashion industry, AI is mostly used to
analyse the receipts and returns to predict the future demand for fashion product and
manage the inventory accordingly.
AI encompasses a wide variety of automated technologies. Among these, Machine
Learning is mostly used in AI among retailers. It is mostly used for consumer-centric
projects. AI brings several benefits to the retailers such as cost savings, increased
productivity and revenue, informed decision making, innovation, and also support in
the resolution of business problems (Feldman, 2019).

Research Question
 What are the key challenges faced by Primark?
 What changes does Primark need to embrace to survive and thrive in the
current business scenario?
Analysis of Primark
SWOT Analysis
Strengths Weaknesses
Low-cost Pricing Strategy Business is largely based on Imports
Well established brand Weak online presence
Presence across 11 countries
Customer trust and loyalty
High market share
Opportunities Threats
Technology advancement Demand for locally sourced products
Improve online presence Increasing demand for sustainable
clothing
Strict industry regulations
Low disposable income

Porter’s Five Forces Analysis

Bargaining power of buyers: it Tends to be high when the customers have a wide
range of choices from luxury to cheap fashion products. many suppliers like Gucci,
M&S, John Lewis, Zara and Next plc. Supplying a wide range of products similar to
Primark. - HIGH

Bargaining power of suppliers: it tends to be high when there are few suppliers
and many buyers. In the case of fashion retail, numerous suppliers are present
within and outside the national boundary. No single supplier has the power to
influence. - LOW

The threat of substitute: it tends to be high when there are several substitute
products are available in the market. E.g., E-commerce sites = website = mobile
application = Physical Stores. Moreover, customers have options for fashion from
several local and international retailers. - HIGH

The threat of new Entrants: it tends to be high where barriers to entry are low. In
the case of Fashion retailing, moderate barriers, high cost, and less fixed. -
MODERATE to HIGH
Competitive Rivalry: it tends to be high in case of extensive competition among the
existing players. The competitors of Primark involves, M&S, John Lewis and Zara
etc. - HIGH

Primary Data Analysis

To analyse Primark's condition and capabilities in meeting the changing retail
scenario, primary research is conducted. a questionnaire survey has been performed
to collect the data from the customers of Primark. A set of 5 questions is asked from
the respondents. The sample size of the survey is decided to be 20 and the
respondents are selected by using a simple random sampling technique. the survey
is performed online by using google forms. The survey is conducted among friends,
classmates, neighbours and family members. The primary research would facilitate
in identifying the gaps and issues that could affect the growth and survival of Primark
in the future.

Need to Strengthen Presence of Brand Across Different Channels

Options Response percentage Responses

Strongly agree 40% 8
Agree 25% 5
Neutral 15% 3
Disagree 15% 3
Strongly Disagree 5% 1
Total 100% 20

Response Chart

5% Strongly agree
15% Agree
40% Neutral
15% Disagree
Strongly Disagree

25%
Discussion: The omnichannel presence is a key trend in the retail industry. in
relation to Primark, the primary data suggests that 65% of customers agree that the
company needs to improve its presence through different channels. It shows that
Primark does efficiently use the different channels that may create a barrier to its
growth in future.

Satisfaction with Primark’s Services During Pandemic

Options Response percentage Responses

Strongly agree 25% 5
Agree 20% 4
Neutral 20% 4
Disagree 25% 5
Strongly Disagree 10% 2
Total 100% 20

Response Chart

10% Strongly agree

25% Agree
25% Neutral
Disagree
Strongly Disagree
20%
20%

Discussion: the secondary research shows that the current pandemic situation has
increased the demand for online presence as well as purposeful operations. The
primary data suggests that the customers of Primark are not completely satisfied
with its services and performance during the pandemic. This may affect the customer
loyalty and brand image as well as the future sales of Primark.

Purposeful and Sustainable Operations

Options Response percentage Responses

 Strongly agree 30% 6
Agree 20% 4
Neutral 25% 5
Disagree 8% 4
Strongly Disagree 5% 1
Total 100% 20

Response Chart

5% Strongly agree
20% 30% Agree
Neutral
Disagree
Strongly Disagree
25% 20%

Discussion: Purposeful and sustainable operations has emerged as a recent trend

in the retail industry. the primary data suggests that around 50% of customers
believe that Primark is focusing on purposeful and sustainable operations.

Use of AI

Options Response percentage Responses

Strongly agree 25% 5
Agree 35% 7
Neutral 20% 4
Disagree 5% 1
Strongly Disagree 15% 3
Total 100% 20
 Response Chart

15% Strongly agree

25% Agree
5%
Neutral
Disagree
20%
Strongly Disagree
35%

Discussion: the above question is asked to analyse the use of AI in Primark.

According to the above chart, around 70% of customers strongly agrees that Primark
efficiently uses AI in its business operations.

Optimum Use of Technology in Business Operations

Options Response percentage Responses

Strongly agree 20% 4
Agree 10% 2
Neutral 20% 4
Disagree 35% 7
Strongly Disagree 15% 3
Total 100% 20

Response Chart

15% Strongly agree

20%
Agree
Neutral
10% Disagree
35% Strongly Disagree
20%
Discussion: use of technology is crucial for the survival and growth of any business.
the above question is asked to gain information on the use of technology in Primark.
The primary research has shown that Primark does not make optimum use of
technology in its business. around 50% of customers suggests that the company
needs to enhance its technology use.

Recommendation
The above discussion has provided a brief knowledge of the key trends in the retail
industry in the present times. Porter's five forces analysis and SWOT analysis has
shown a strong industry presence of Primark, Although, the research data indicates
several novel challenges to the company. the trends and challenges that are
discussed here are Omnichannel presence, purposeful and sustainable operations
and use of Artificial Intelligence and machine technology. In order to survive and
grow, retail organisations need to identify these trends and embrace the changes
accordingly.

In relation to Primark, the company is facing several challenges in the present

business environment. Primark lays more emphasis on physical presence rather
than developing its online presence. Considering the current trend of Omnichannel
strategy, the company may face serious threat due to its current approach. In the
present times of Pandemic, several organisations are enhancing their online
presence, but the customers of Primark are not satisfied with its services. It is
recommended that Primark should focus on improving its presence across different
channels to maintain its competitiveness.

Secondly, sustainability and purposeful business objectives are in trend. The

customers want to spend in those brands that have better purpose over profit.
Primark has started to put people first but the company is behind the competition.
Several competitors in the fashion industry have come forward during the pandemic
to win customer trust. But Primark did not make any significant step in this times that
may affect its customer loyalty and trust. Thus, it is recommended that Primark
should focus on developing purposeful and sustainable policies to sustain and
increase customer trust and brand value.
Lastly, the use of AI and machine learning emerges as the crucial trend that would
change the future of retailing in near future. The primary analysis has suggested that
Primark, does use technology but is unable to make optimum use of it. Therefore, it
is suggested that the company should invest in AI and machine learning to keep up
with the trend and enhance the competitiveness, profitability and productivity of the
organisation.

Conclusion
In conclusion, the retail industry is consistently facing changes due to changes in
customer behaviour, perception, and changing technology. The above report
highlights the key changes in the retail industry in the present times i.e. omnichannel
strategy, sustainable and purposeful business and use of Artificial Intelligence and
machine learning. Here, the capabilities of Primark company is analysed in relation
to the current trends. The company has a strong industry hold in the present, but it
lacks in several areas like an inefficient use of technology, lack of online presence
and competition. The company needs to focus on these factors to sustain and grow
in the constantly changing fashion retail industry.
References
Bengts, M., 2020. The future of the retail industry.

Businesswire, 2020. Fashion and textiles industry keen to go green despite COVID-
19 pandemic [Online]. Available From:
https://www.businesswire.com/news/home/20201012005846/en/%C2%A0Fashio
n-and-textiles-industry-keen-to-go-green-despite-COVID-19-pandemic [Last
accessed on 28th April 2021].

Feldman, S., 2019. Machine Learning Dominates AI Use for Retailers [Online].
Available From: https://www.statista.com/chart/19351/ai-use-in-retail/ [Last
accessed on 28th April 2021].

KPMG, 2020. Global retail trends 2020 [Online]. Available From:

https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/05/global-retail-trends-
2020.pdf [Last accessed on 28th April 2021].

Kunc, J. and Križan, F., 2018. Changing European retail landscapes: New trends
and challenges. Moravian Geographical Reports, 26(3), pp.150-159.

Lee, Z.W., Chan, T.K., Chong, A.Y.L. and Thadani, D.R., 2019. Customer
engagement through omnichannel retailing: The effects of channel integration
quality. Industrial Marketing Management, 77, pp.90-101.

Rahdari, A., Sheehy, B., Khan, H.Z., Braendle, U., Rexhepi, G. and Sepasi, S., 2020.
Exploring global retailers' corporate social responsibility performance. Heliyon,
6(8), p.e04644.

Vashisht, K. and Mittal, S., 2019, July. Artificial Intelligence as a Tool in the Online
Fashion Retail Industry to Communicate Fashion Trends. In International
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developments (pp. 276-282). Springer, Cham.

Von Briel, F., 2018. The future of omnichannel retail: A four-stage Delphi study.
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Appendix
Survey Questionnaire

1. Do you think Primark needs to strengthen its presence in different channels?

2. Is u satisfied with the services of Primark during the Pandemic?
3. Do you think that the company has purposeful and sustainable operations?
4. Do you think the company utilizes AI efficiently?
5. Do you think the company make Optimum use of technology in its operations?