Next PLC - Clothing Retail

Contents Page

.0 Introduction

.1 Background

2.0 Competition

3.0 Observational Research

3.1 Store Environmental Design

3.2 Merchandise Presentation

3.3 In store customer communication

3.4 Consumer senses appeal

4.0 Interview/Questionnaire

5.0 Performance of the retail industry

5.1 Analysis of Next and key competitors

6.0 Positioning

7.0 Store location

7.1 Shopping Centres

7.2 Retail Parks

8.0 Marketing Mix

8.1 Product Design

8.2 Product Range

8.3 Shelf Space

8.4 Advertising

9.0 Recommendations

0.0 Reference list

1.0 Appendices

.0 Introduction

The following report will initially offer an insight into Next plc and will go into detail to investigate and evaluate Next PLC in terms of their characteristics, history and performance as retailers.

Analysis will take place in the form of both primary and secondary research and will relate the past and present consumer trends and evaluate the effect this has had on current retailing in the sector in the U.K including competitor positioning. Primary research will take place in the form of an observational study of two or more Next stores and competitors in order for comparisons to be made. The author also felt it necessary to carry out a small questionnaire regarding consumer's views on Next and some of its main rivals.

The report will also take into account and analyse the company's position and its retail marketing mix.

Based on the conclusions derived from the analysis mentioned above the author will endeavour to offer explanations for the success of Next and make recommendations for future success.

.1 Background

Next retail chain was founded in 1982 when menswear specialist J Hepworth and Sons purchased a chain of rainwear shops called Kendalls and converted it into womenswear under George Davies. The first store opened with an exclusive co-ordinated collection of stylish clothes, shoes and accessories for women in February 1982 and by the end of its first season the Next concept had proved so successful that it was already trading from 70 stores throughout the UK. It was not long before collections for men, children and the home were soon made available.

The launch of Next men took place in August 1984 and by December of the same year was trading from 52 shops. 1984 also saw the launch of the first mini department store in Edinburgh incorporating womenswear, menswear, shoes and a café.

Next was one of the first to stretch its clothing brand to home wares with the introduction in 1985 of Next interiors range of soft furnishings. The same year the first department store to incorporate womenswear, menswear and interiors opened in Regent Street, London.

In 1986 Next became Next plc and in the same year acquired the Grattan plc (mail order company) from which Next directory was to be launched.

Childrenswear was added to Next in 1987 called simply 'Next boys and girls' and this was followed by the introduction of the Next directory in January 1988 in the form of a hard book containing 350 pages.

The rapid expansion of Next as described above threatened to stretch the recently established brand too far. This aggressive expansion was in danger of undermining the strong brand appeal that had helped create the initial success. By the end of the decade Next was in financial trouble and this lead to the departure of George Davies who went on to become one of Next's main competitors creating George at Asda clothing brand.

Next however survived and today trades in over 450 stores in the U.K and Ireland and continues to offer its products through Next directory and online shopping which was launched in 1999. The company continues to expand its already large range of services with the addition of next flowers in 2001 and the most recent Wedding List Service in 2005. Recent years have also seen several larger format stores open across the UK in particular in edge-of-town or out-of-town areas as the company concentrates on relocating stores to larger units which allow a much wider product offer.

2.0 Competition

In order to analyse and compare Next it is important to establish who their main competition is. Due to the diversity of the product range Next competes with a wide variety of businesses ranging from Next's traditional competitor in Marks and Spencer to in recent years stronger high street players as well as increased competition from supermarkets. Therefore below are listed some of Next's more well known potential competitors (which vary according to product offer)

*

* Arcadia group (Top Shop etc)

* BHS

* Asda

* Debenhams

* French Connection

* Gap

* H & M

* Ikea

* John Lewis

* Marks and Spencers

* Matalan

* MFI

* Moss Bross

* Mothercare

* River Island

* Tesco

* TK Maxx

* Zara

Despite increased competition in Next's primary focus the clothing sector, M&S, Next, Arcadia Group, Matalan and BHS still represent 44% of the total sales of 2004 'making the UK one of the most concentrated clothing sectors in Europe' Mintel.

3.0 Observational Research

The observational research was based primarily on three Next stores located in the following areas;

* Cambridge City Centre

* Leeds City Centre

* Cambridge Grafton Centre

The author chose these stores as he felt they offered a good comparison of stores across the country and also the chance to analyse and compare Next city centre stores to out of town stores (Cambridge Grafton Centre).
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Using the total visual merchandising process when analysing the three stores the author aims to outline key differences and also to make comparison against its main rivals.

The first thing the observer identified between the three stores was how similar they were in the four key areas; store environment deign, merchandise presentation, in-store customer communications and consumer senses appeal.

3.1 Store environment design

It became apparent from researching Next that the newer shop fascias are predominantly glass creating a much more modern and sophisticated feel.

Inside the three stores were very similar ...

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