Fashion Retail: Types, Trends and Developments (2024)

Shubham Anil Jain
Aditya Birla Fashion and Retail Limited
Bangalore, India
Email: shubhamajain125@gmail.com

Introduction
Retailing is defined as the process of selling merchandise to consumers that offer value and engagement through a successful exchange of goods and services. It is witnessed that, the retail industry has transformed and evolved over the last several decades, launched through technological development. This encompasses traditional bricks and mortar stores, e-commerce and online retailers. The fashion retail industry plays a important role in what we wear, what we look like and how we live, with its increasingly sophisticated consumer demanding more. Fashion retailing activities need strategic planning, and analytical methodology viewed from several perspectives; the consumer, the competition, the category and the retail company. Across these four perspectives, one examine the functions of retailing, consumer buying behavior, external influences affecting retail operations as well as the key thinking needed to be a successful player in the industry.

Different Types of Retail Stores:
The type of retail store plays a very important role, as it influences from store layout to the type of customer you attract. Let’s look at the different retail categories in more detail.

1. Department Store:
They are often seen in malls, a department store is a retailer offering a huge variety of consumer goods in different areas (or departments) of a store. Department stores have a reputation as being a little pricier than big box stores and selling higher-end brands. Examples of department stores are, Macy’s, Kohl’s, and Neiman Marcus. The average size of department store is around 250,000 square feet and often uses the loop layout to connect customers to every department.

2. Off-Price Retailer:
The off-price retail model is a replica of the discount retail model. Here, mainly retailers typically highlight the “normal” retail price alongside their lower price so customers can see what kind of deal they’re getting. Basically, off-price retailers are independent of manufacturers and buy large volumes of branded goods to sell at a reduced cost. Examples include TJ Maxx, Burlington Coat Factory, and Nordstrom Rack.

3. Discount Store:
They are famous for having lower-than-average prices; a discount store’s secrete lies in merchandising. Retailer’s objective is to give the feel of offering all their products for less than the average retail price. Think Dollar Tree, Big Lots, or Five Below as examples of discount stores. These stores average size is 10,000 square feet and leverage the loop layout to encourage customers to explore the whole store. Smaller format stores like TJ Maxx are approximately 30,000 square feet, while stores like Nordstrom Rack can be upwards of 120,000 square feet.

4. Warehouse:
Costco or Sam’s Club, are warehouse retailers of food and product that offer large quantities of items at attractive discounts. These stores create a simple experience and instead focus on moving products in higher volumes. The average warehouse ranges from 84,000 to 146,000 square feet and generally follows a loop layout.

5. Convenience Store:
They are small in size and offers “quick trip” experiences, convenience stores are hallmarked with longer open hours and convenient locations. They typically provide a basic foods and drinks, alcohol, and everyday essentials. Many also have a fuel station as part of their operations.

6. Grocery/Supermarket:
Grocery stores and supermarkets offer a general range of food products. They include fresh and packaged foods, beer and wine, pet food, and basic household products like paper goods and cleaners. Safeway, Kroger, and Whole Foods are examples of the grocery or supermarket retail category. The average grocery store size is currently 38,000 square feet, with small formats ranging in size between 12,000 square feet and 25,000 square feet, and even smaller micro-stores in urban markets. In recent years, we’ve seen a number of small-format grocery stores emerge, such as Aldi, DG Market, and smaller versions of larger chain stores.

7. Big Box/Superstore:
Walmart, Target, Lowe’s, and Home Depot are dominating the big box retail scene. These retailers (and others in this category) occupy a great amount of physical space and supply a variety of goods in multiple product categories. For instance, you can pick up plants, hand soap, mailing supplies, and a new drill all in the same store. Big box stores typically occupy more than 50,000 square feet, with typical ranges between 90,000-200,000 square feet. They often have their own parking facilities.

8. Specialty Store:
As the name suggests that, specialty stores are deep assortment of brands, styles, or models within a relatively narrow category. Examples include craft stores, furniture stores, garden centers, sporting goods stores, and bookstores. The average size of a specialty store ranges depending on the type of store it is. Specialty stores can use a different types of layout based on the scale of their operations. For smaller stores, a free flow layout inspires curiosity, while a grid, loop, or diagonal layout is optimal for medium and larger stores.

Trends in Fashion Retailing:

1. Social shopping:
Nowadays, social media has become the new storefront. Already, it is seen that many fashion leaders are creating links from Instagram, Twitter and Pinterest to retail sites and taking commissions of 3 percent to 20 percent, depending on their profile and arrangements. Many social media superstars such as Chiara Ferragni (are also paid between $30,000 to $50,000 to participating and hosting brand events with luxury houses such as Louis Vuitton and Dior and are expected to earn U$8 million this year. Various luxury brands including Tiffany & Co., Burberry and Cole Haan have also taken to try with shoppable Instagram, Pinterest and Twitter ads. Now, retailers are trying to start their own social media sites, as evidenced by Net-A-Porter’s The Net Set.

2. Quick fashion recognition:
As per the forecasting, street fashion will take on even more popular as new technology will make it possible to image any item of clothing, identify it and then buy it. Cortexica, a U.S.-based provider of visual search and mobile image recognition was an early entrant into this field and has been billed as the Shazam for fashion. Snap Fashion in the U.K., Style-Eyes from Ireland and Slyce in Canada are a few other startups developing this technology.

3. Body v/s fashion:
Increasingly, personal style is moving away from the wardrobe. Clothing is often becoming the side show to tattoos, multiple ear piercings, nose piercings and hair-dos. It has been reported that 54 percent of millennials have a tattoo, non-earlobe piercing or non-traditional hair color. Clothing is reduced as people turn to pared-back fashion from APC or COS to let their body fashion stand out.

4. Couture re-establishment:
Because of the fast fashion, now consumers can get the latest designer looks for a small fraction of the price. The high-fashion customer has wanted to mix high and low for some time. Designer fashion will now try to increase the gap by starting to put their energies behind couture. While some brands such as Saint Laurent are returning to couture as Yves Saint Laurent, for the first time in a decade, others such as Viktor & Rolf and Jean Paul Gautier have forgone ready-to-wear altogether in favor of couture.

5. Engagement retail:
In today’s world, customer engagement remains a priority for retailers, and this need is increasingly played out across the “separation of retail,”. Retailers need to find new ways of engaging with customers in a way that benefits them across three broad themes: information, convenience and entertainment. Engagement retail is about intuitively understanding the type of relationship that a customer wants to have at any given time and delivering on that need. Because of CRM programs, retailers get to know about their customers’ preferences, behavior and preferred products, and they will be more intuitive in how they engage.

Prominent Fashion Retailers:

1. H&M
This company came quite close to ASOS and was originated in 1947 by Erling Persson in Sweden. Initially, H&M was a women’s clothing retail store. However, now it has been expanded to men’s clothing after acquiring a men’s clothing brand. H&M earned many companies like Cheap Monday, COS, Monki, Weekday, and many more. Currently, H&M is available in over 47 online and 71 physical markets. This fashion retailing company also controls thousands of stores all over the world. The Persson family still controls the brand and holds a 46% stake in the company.

2. ASOS:
This fashion retail company remains the undoubted online fashion retail world leader. The specialty of this brand is that, they not only deliver to most countries around the world, but they also offer their customers free returns. Whether you’re looking for an outfit to go out in, sportswear, maternity wear, office wear, or something you’re comfortable with lounging around the house, ASOS has various options for consumers. It also offers various sizes, whether tall, plus size, curvy, petite, or other options.

3. Macy’s:
It is a popular fashion retailing company in the US. This company is famous as one of the largest chains of department stores in America, Guam, Hawaii, and Puerto Rico. This company deals with men’s and women’s clothing. In addition, they also retail children’s clothing, accessories, jewelry, and handbags. The brand stocks items from thousands of brands, including luxury brands like Chanel, Calvin Klein, Burberry, Dolce Gabbana, etc.

4. The Gap:
When it comes to fashion retailing, The Gap is a prominent company. This company was established in 1969 by the Fisher family. The first shop opened in San Francisco, and this retail company has grown since then. Very soon this fashion retailer owned 25 stores by 1973. The company began to enter in international markets and became known as one of the leading fashion retailers in the industry. The Gap is the go-to fashion retailer for jeans. This company offers jeans like thin, tall, petite, and plus-size jeans.

Conclusion:
Fashion retailing has grown very fast and still continually growing; more stores are popping up with technological breakouts. This is good for the fashion industry as it also increases the number of opportunities in the fashion industry. However, there are many obstacles, as the market is saturated. However, by following the lead of these fashion retailing companies and the tips, fashion retailing business is headed for success.

References:

1. Fashion Retailing- Everything You Need To Know, https://440industries.com/fashion-retailing-everything-you-need-to-know/
2. Introduction to the Fashion and Retail Industry, https://www.icms.edu.au/courses/undergraduate/introduction-to-the-fashion-and-retail-industry/
3. What are the Different Retail Store Types?, February 2, 2022, https://spc-retail.com/what-are-the-different-retail-store-types/
4. 10 new trends in fashion retail, a MCD columnist, ByTammy Smulders, https://www.retaildive.com/ex/mobilecommercedaily/10-new-trends-in-fashion-retail
5. Pride, W.M., Ferrell, O.C. Lukas, B.A., Schembri, S. Niininen, O. and Cassidy, R.,Marketing Principles, 3rd Asia-Pacific ed., Cengage, 2018, p. 451

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