ResearchDissertationinBachelorofArtsinBusinessManagement

WHATARETHEMAJORIMPACTSOFCHANGEIN
STOCKINTHERETAILCLOTHINGINDUSTRY?

Undertheguidanceof
Dr.ASADGHALIB

Name:TarunSonthalia
StudentIDnumber:13007016
Modulename:ManagementConsultancyProject
Modulecode:BMAHE005AZ2013/4
Submissiondate:07/05/2014

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Declaration
I hereby declare that the work incorporated in the present research project entitled Impacts of
change in stock in the retail clothing industry is my own work and this work has not been
submitted to any university before for the award of any degree.

Signature __________________

Date_______________

Tarun Sonthalia
13007016
Management consultancy project
Liverpool Hope University

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Acknowledgement
My study on Impacts of change in stock in the retail clothing industry and the efforts put into this
dissertation have brought me various favours and debts.
I would particularly like to thanks Dr. Asad Ghalib who gave his time to assist me with all the
necessary information, as well as for his valuable assistance and guidance needed to complete this
study. His remarks and insights were of great value.
At the outset, my jovial thanks to all the respondents who gave me their valuable time in getting the
information to undertake the research work.
I would like to recognise and thank my parents Mr and Mrs Sonthalia for their undying support.
Finally, I thank all those who helped me directly or indirectly in the successful completion of this
work. Their kindness and courtesy is gratefully recorded in my heart.

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ABSTRACT
This research aims at finding out the various impacts or reasons of change in stock of the retail
clothing stores. The research mainly looks at the stores in UK and shows what are the various
decisions taken by the organisation while making changes in their stock. There are a number of
impacts or variables which have an impact on stocking decisions which have been discussed in the
study.
The results show that seasons play a major role in making stock decisions for the clothing stores.
Also, one of the other major variables that played a major role in stocking decisions was on going
fashion trends. The stores have to keep up with the on-going fashion trends so as to attract more
customers and generate revenue.
Another finding which this study found was the interest of the unbranded stores in the e-commerce
world. The unbranded stores want to enter the digital world so as to expand their reach and provide
convenience to the consumers like the branded stores. There is scope of future research in this topic.

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Table Of Contents

Contents
Declaration....................................................................................................................... 2
Acknowledgement............................................................................................................ 3
Table Of Contents............................................................................................................. 5
1

INTRODUCTION.......................................................................................................... 7
1.1

History................................................................................................................. 7

1.2

Global Apparel Industry....................................................................................... 7

1.3

UK Apparel industry............................................................................................. 8

1.4

Research significance.......................................................................................... 8

1.5

Research Questions............................................................................................. 9

1.6

Objectives Of The Study:..................................................................................... 9

1.7

Synopsis of the chapters..................................................................................... 9

Literature Review..................................................................................................... 11
2.1

Price and sales................................................................................................... 11

2.2

Fashion and Brand recognition..........................................................................12

2.3

Variety............................................................................................................... 14

2.4

Customer Experience........................................................................................ 14

2.5

In-store Display.................................................................................................. 15

RESEARCH METHODOLOGY...................................................................................... 16
3.1

Introduction....................................................................................................... 16

3.2

Data collection................................................................................................... 17

3.3

Instrument of Data Collection............................................................................17

3.4

Qualitative Research and Its Advantages..........................................................17

3.4.1

Advantages:................................................................................................ 18

3.4.2

Disadvantages:........................................................................................... 18

3.5

Sampling Design................................................................................................ 19

3.6

Sampling Unit:................................................................................................... 19

3.7

Rationale of The Study...................................................................................... 20

3.8

Consent............................................................................................................. 20

FINDINGS AND ANALYSIS......................................................................................... 21

4.1

Introduction....................................................................................................... 21

4.2

Findings............................................................................................................. 21

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4.2.1

ZARA........................................................................................................... 21

4.2.2

HUGO BOSS................................................................................................. 22

4.2.3

AMERICAN APPAREL.................................................................................... 22

4.2.4

ULTIMA MODA.............................................................................................. 23

4.2.5

DIRECT DESIGN........................................................................................... 24

4.2.6

STORM......................................................................................................... 24

4.3

Analysis............................................................................................................. 25

4.4

Measurement of change in stock.......................................................................27

4.5

Biasness............................................................................................................ 28

CONCLUSIONS.......................................................................................................... 29
5.1

Introduction....................................................................................................... 29

5.2

Conclusion......................................................................................................... 29

5.3

Recommendations............................................................................................. 30

1 INTRODUCTION
1

History

The apparel industry consists of products like clothes, footwear, luxury goods and accessories.
Earlier the companies used to sell their products to the wholesalers, who would further pass it on to
the retailers. But today, large companies have connections with both types of operations (Spencer,
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2014). First, the apparel industry consisted of professional tailors and dressmakers. In the early
twentieth century, the middle class in the urban areas were in their growing stages which began to
purchase ready to wear affordable fashionable merchandise which gave rise to a whole new era.
These ready to wear merchandise included, industrialized production methods for manufacturing,
unlike the traditional production methods (Wally barker, 2010).

Global Apparel Industry

Even though the global economy is facing a downturn, the global apparel industry has been
flourishing at a healthy rate. The global apparel industry - showcasing clothing, footwear and luxury
goods - reached an estimate of around $2,560 trillion in 2010. The luxury goods segment and the
accessories section accounts for almost 55% of the overall apparel market. The overall markets
expectation for 2015 is around 3,180 billion dollars, with an annual growth of 4%. Also the ecommerce has helped the apparel industry flourish. Especially in China, the growth rate of ecommerce had almost doubled between 2011-12. One of the main reasons for the boom in internet
sales was due to the convenience factor. Childrenswear, menswear and womenswear are expected
with high growth in the year 2014 with a growth rate of 15%, 14% and 12% respectively.
(Bodimeade, 2013)
Stores with single brands help give the company control and higher competitiveness and good brand
image. Apparel companies relinquish some control over branding and merchandising at department
stores, and their influence is diluted further at the boutique level. Good and reputed stores allow
company to display their own merchandise without worrying about competition. (Spencer, 2014)

UK Apparel industry

Apparel industry in the United Kingdom, is one of the leading industries in the UK with key players
like Burberry, Marks & Spencer, Next, TopShop, Asos, Mulberry, Supergroup and French
Connection.

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(Fashion united, 2009)

The total expenditure on clothing and footwear in UK is around 59 billion. The retail sector in the
UK contributes up to 8% of the total Gross Domestic Product (GDP). Great Britain is the leading
sector of manufacturing clothing with high quality fabrics employing about hundred and fifty
thousand people. (Campopiano, 2014).

Research significance

The main reason to carry on this research on Impacts of change in stock in the retail clothing
industry is to get the insight of the industry encompassing its characteristics, how much people
have impact on the stocking decisions of the retail stores.

Research Questions
What are the various impacts or reasons for change in stock in retail clothing industry?
What are the motives while making stock decisions?
How often do retail stores change their stock?
Role of e-commerce in todays world?

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 How do seasons affect stock in stores?

How much autonomy do the store managers/ employees have?

Objectives Of The Study:

To study the various reasons or impacts of change in stock in retail clothing

industry.
To analyze about the main motives while deciding about the stock in the store.

To find out how often stocks are changed.

To find out how important is e-commerce in todays world in high end and low end
stores.

To find out the role of seasons in stock management.

To find out the amount of autonomy the mangers/employees have.

Synopsis of the chapters

The framework of this research is structured in such a way to gain insights on the topic in research
and thus includes 5 chapters namely literature review, methodology, research and findings and
conclusion. A brief outline of each is given below -:
Chapter 2 is the literature review which includes the study of previous secondary data which is done
on this topic. This chapter mainly includes articles which support the topic. How and what are the
different factors affect the stocking decisions in retail clothing stores.
Chapter 3 includes all the methods which were needed to be adopted to carry out this research and
thus it talks about the nature of the research design, appropriateness of qualitative method for the
study. Also the use of interviews has been reasoned and the uses of all the other research instruments
have been explained. Apart from this the criteria for the sample size has been disclosed. This chapter
also explains the consent taken from the respondents and why is it important.
Chapter 4 reveals the interpretation of the responses which were collected through interviews. Some
of the conclusions made in the questionnaire were consistent with the literature review and some
were opposing. Findings have been made on the basis of the interviews conducted.

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Chapter 5 relates to the conclusion where the findings from the study have been summarized. This
chapter also explains the limitations faced while conducting the research and includes implications
and recommendations for the future study on this topic

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Literature Review

This chapter will highlight and include some of the articles that will help support the topic. Also, this
chapter will show the various factors and characteristics or determinants that affect the stocking and
display decisions of the stores. This chapter will help the researcher support his research with the
findings made in the past.
Some of the various reasons that have an effect on a stores stocking decisions are listed below.
1
Price and sales
Lazear (1986) in his working paper has tried to depict retail pricing and clearance sales. The paper
tries to predict that removing prior clothes may result in higher initial price but also rapid fall, old
goods which are obsolete are prone to have lower initial average price and also the prices tend to fall
on behalf of the time it on the shelves, if a good is good in the first period, the price would be
unchanged but if the first period of a product is unsuccessful leads to price reduction, non-storable
goods have a lower initial price as compared to storable goods and rigid pricing strategies are taken
into consideration in certain bargain situations.
Another research by Grewal et al (2011) tries to find the innovation in retail prices and promotions.
The research broadly classifies innovation into three aspects which are target market, price and
promotion models and how design elements can increase effectiveness. While targeting the
consumers, the research shows that strategies like targeted online promotion (where promotion is for
selected individual customers) and technological enablers (mobile advertising). While deciding
pricing and promotion models the organizations improvise new promotion techniques like volume
based pricing, conditional promotion, dynamic pricing, etc. The third aspect shows how online and
offline design helps the consumer buy a product and how advanced technology helps the retailer to
know what the consumer wants to buy. These articles try to depict the role of price and sales in a
retail store and how managers make various decisions about the discounts so as to attract more
customers and increase revenue. The present study will show how these factors have an effect on
their stocking decision. Chen, Monroe and Lous (1998) research topic aims at finding the difference
in consumers perception while framing promotion messages. They have tried find what goes on a
consumers mind when the price of a product is reduced by percentage versus dollar terms in both
high and low price ranged products. The research found that people think more in dollar terms in
high priced products and totally the opposite in the low priced products. It was also found that
coupon promotion was more effective than discount promotion. The research also shows that framing
promotions not only changes consumer perceptions but also changes the purchase intention of the
buyer. This shows what strategies retail stores initiate to attract more and more consumers.
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Gupta, Hill and Chameeva (2006) in their research have tried to find the pricing models that the
companies initiate to clear end of season retail inventory. The research shows that the retailer needs
to answer two questions, first is how much discount to offer and secondly, timing the markdown. The
numerical findings in the research show that its better to give a deterministic model with multiple
markdowns rather than a stochastic or non- deterministic single markdown. In the words of Gupta,
Hill and Chameeva (2006, p.536) we obtain upper and lower bounds for the expected revenue and
for the optimal prices for the stochastic multiple-markdown problem. We also show that when the
joint distribution of demand is smaller in the convex order of partial sums of demand, the
corresponding store can realize greater expected revenue. This research shows the when and why do
retail stores opt for stock clearance sales.
Different organisations have different loyal customers, and hence companies want to retain these
customers as they can prove to be an asset for them and therefore opt for dynamic targeted pricing
which is depicted in this research. Chen and Zhang (2009) have tried to find how different firms opt
for dynamic and targeted pricing to attract strategic consumers. These days the customers have
become aware of the various pricing strategies the companies initiate to generate revenue. The main
thing an organisation needs to retain all its customers with attractive discounts and price shredding.
The research also reveals that the best and the most common way to implement targeted pricing is to
know the consumers past buying history. The research also shows that this method is better than
monopolist pricing as in this there is price competition rather than price discrimination.
2
Fashion and Brand recognition
Other determinants or variables that have an effect on the perception of the consumers as well as the
organisations are fashion trends and brand recognition. The present study will help us find as to what
are the main reasons that organisations have in mind while making decisions like change in stock.
Barnes and Lea- Greenwoods (2010) research tries to depict the impact of fast fashion on the retail
clothing stores specifically in UK. The results show that the top level management do not know what
type of demand is prevailing in the market. There is a change in demand each day and the store
managers arent able to cope up with the stock which is coming in every day. For example, people in
Manchester are more attracted towards celebrity trends, which might not be the case in London. The
results also show that window display is one of the major communicating aspects of the latest
fashion trends and it should be responsive to the latest consumer demand. The research also tells us
about how the stores do not have sufficient resources to cope up with the fast fashion. But now days,
fast fashion has become the mainstream strategy of the retail stores in UK. This research also looks at

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another variable that is the market demand. Even market demand has a considerable effect on the
stocking decisions of an organisation.
Castelli and Bruns (2008) research depicts the implementation of the supply chain strategy in the
fashion industry. Castelli and Brun have taken the examples of Fratelli Rossetti, Brics and Parah to
show how the supply chain strategy plays an important role in shaping the fashion industry today.
They also found out that the three main driving forces of the supply chain strategy were brand
positioning, the retail channel and the product characteristics which were found to be common in all
the three companies of research. The research shows how various fashion companies are improvising
the supply chain strategy. Another independent variable seen here is the supply chain.
Christopher, Lawson and Pecks (2004) research aims at finding out the responsiveness of the supply
chain in todays environment. The research shows how volatile and short life cycles fashion markets
are today. The research also shows how the business organisations should be ready and responsive to
the highly volatile demand and to the constant changes in consumer tastes and preferences. The
research also tries to depict how an agile supply chain should be. It should be market sensitive,
virtual, network based and process aligned. The quick response (QR) strategy adapted by the
manufacturers and retailers these days has taken the fashion industry to an all new level. It is much
easier to respond to the volatile demand and hence meet consumer needs.
As the study will be looking at retail clothing stores, it will show us how brand image and goodwill
helps attract customers and also how organisational decisions are related to goodwill of the brand.
Porter and Claycomb (1997) in their research have tried find out the impacts of brand recognition in
retail stores. A well established brand name is the biggest asset a company can have. They have tried
to show how organisations can help in increasing their brand value. The research has mainly
classified the various aspects needed to have good brand image. These aspects are brands and
retailers dont have an easy alliance, its not always about the designer labels, the retailer needs build
his/her own identity or brand, the retailers should be able to attract more customers and finally the
main motive of business is service.

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Variety

Variety or choice of goods is another variable which is very crucial to decide upon while running a
retail store. Ketzenberg et al.(2000) in their research have spoken about how dense a store should be.
The researcher tries to show the various benefits a store will pursue if they have a dense inventory
that is more inventory with huge variety. But the large retailers are retaining to the traditional
inventory management policies, where like small retailers, the stores have huge inventory with lower
variety. Results in the grocery industry show that having a dense store would give better gains to the
consumers and increase satisfaction. The research also shows how latest technology can help the
stores deal more efficiently with effectiveness.
Schneider and Klabjan (2013) have tried to find how different retail stores have control over their
stock or inventory. The research shows that there basically two supply chains depending upon the
non-deterministic demand. The research also how the online retailers on one hand sell through
various shopping platforms and on the other hand run a self-managed online store, due to which they
are liable for penalties. The research also specifies that there was a conflict between the
restrictiveness of assumptions on arrival process and restrictiveness of optimality conditions. Online
retailing is one of the most emergent markets of all times. People want more and more convenience
that is they want to enjoy the benefits of the goods and services sitting at home. Therefore, the
research also would be looking at the various impacts of online trading on retailers.

Customer Experience

Another major determinant of decision making in retail clothing stores is the customer experience.
Good customer experience could lead to increased sales and also the customer being loyal to the
brand which will completely be opposite in the case of a bad customer experience. Grewal, Levy
and Kumar (2009) have tried to find out about the customer experience management in retail in their
research paper. The research shows that there are five fields through which the customer experience
can be improved. First is the promotion experience, where the retailers try to persuade the consumers
by putting up various promotional offers and change stock. Next comes the pricing experience where
the retailer lowers the price if its products, then the branding and merchandising experience where
the retailers have to bring in the right stock at the right time according to consumer needs and wants.
Next is the supply chain management experience, where the retailers need to meet the consumer
expectations ethically. The final one is the location experience where the stores need to be accessible
to the consumers. The research also mentions retail metrics which says that brand and customer

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value, word of mouth, retention and acquisition, cross-buying and up buying, multiple channels and
product returns help in improving the retail environment.
Merlo, Bell, Meng and Whitwell (2006) have researched on the topic Social Capital, Customer
Service Orientation and Creativity in Retail Stores. The research shows that for established
customers, it can be frustrating if the store is trying to be creative as they expect a sense of
predictability. Creativity may also lead to inefficiency and lower customer satisfaction. The research
also found that open communication leads to customer service orientation and in-store creativity. The
authors also find a positive relationship between customer service orientation and shared vision,
shared vision and creativity, trusting culture and customer orientation and a positive relation between
customer service orientation and store performance.

In-store Display

The present study will have look at the in-store display of stock and on what basis the retail clothing
stores make their decisions based on the stock they want to portray or display. Allenby and Ginter
(1995) in their research have mainly emphasized on the households as to how they react to the instore displays and featured advertisements. According to Allenby and Ginter (1995, p.78) in-store
displays and feature advertisements influence interbrand competition through household
consideration sets. The research also concludes that in-store displays and featured advertisements
help in reduced competition and higher profits. Further literature on displaying stock is done by Tan
and Karabati (2013). Their research tries to find about the retail inventory management with stock
out based dynamic demand substitution. The finding shows that inventory management doesnt affect
the consumer decision directly. The research also shows that explicit accounting for substitutes can
increase or improve the performance of the inventory system which will in turn show results of
higher profit margins. This will help in managing the inventory in a proper way and also achieve
organisational goals.
Another variable that majorly effects a stores stocking decision is season. It is a quite obvious
variable as stores will first have a look at the season and then decide their store inventory.

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3
1

RESEARCH METHODOLOGY
Introduction

In the earlier chapter the literature review connected to the research objectives was shown. This
chapter answers us as to how and why the research was carried out review gave us an insight about
the previous researches done in this area, their findings, their conclusions, their limitations, etc. This
helps us to derive valuable insights into the topic in hand and also increases the probability of
receiving appropriate answers to the questions in the survey. This chapter also highlights the methods
that we have used to explore this study and also tells us why the used methods that is data gathering
methods, research design, sampling methods, etc; were appropriate over the others.
The study will be in a form of pure or basic research. This type of research is taken for the sake of
knowledge without any intention of applying it in practice. It is not always problem oriented and is
undertaken out of inquisitiveness. It may lead to discovery of a new theory or supporting an existing
one. Using this method of researching would involve less time and expenditure. It lays a foundation
for applied research. It is also known as fundamental research which is used to find the fundamental
bases of behaviour (Wilson, 2003). The main reason for choosing this type of research is to know
more about the retail clothing industry and how different brands make their stocking decisions also
how they cope up with the demand in the market. Basic or pure research aims to explain, describe
and predict fundamental bases of behaviour (Fresno, 2006).
The reason for choosing this method of research was to find out how high end brands and low end
brands make their stocking decisions and how does their authority help in making stocking decisions.
Also, the research will help in finding out how various clothing brands opt for discount policies to
increase sales and revenue. This research would further tell us how they want to transform from
physical business to e-commerce, one of the most emerging sectors in the world. The research will
help find out what are the various factors a clothing brand needs to look into to achieve their goals
and objectives and also customer satisfaction. Overall, the research will be giving a picture of the
various impacts or the various reasons, due to which a retail clothing brand or an organisation have
to change their stock. Some of the main reasons are fashion trends, seasonal stock change,
competition, market demand and price.

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Data collection

Primary data was collection through questionnaires in the form of interviews from the various
managers and owners of the retail clothing stores. The research includes interviews of six retail
clothing stores, of which three were high end and branded, whereas the other three were unbranded
stores in the malls of city centre, Liverpool. Two malls were selected as the location, so that it was
easy to get interviews in the various clothing stores around. This would help compare both the high
end and low end brands and how they make stocking decisions.

Instrument of Data Collection

The main instrument of data collection was personal interview through questionnaire. Being a
qualitative research, personal interview or telephonic interview is a must, to gather as much reliable
data as possible, so that the analysis is done well. The questionnaire mostly contained open ended
questions, which helped gather more and more information from the store manager or the owner.
Open-ended questions are those questions which give the right to the respondent to answer freely
unlike choosing from a list of pre-determined or obvious answers. The questionnaire used has a few
close ended questions as well, making it easy to compare data between the two set of stores chosen
with the help of graphs and pie diagrams.

Qualitative Research and Its Advantages

Qualitative research looks into the process rather than the outcome of the process. They have more to
do with process than what the result is going to be. Qualitative research is also called as the field
research, where there is a lot of fieldwork involved and the researcher has to observe things about
which he/she is researching in their natural setting. The various methods of data collection that could
be involved in qualitative research are in depth interviews (done in this research), focus groups,
immersion, participation and direct observation (Patton and Cochran, 2007).

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Advantages:

Cheaper.
Focuses on smaller groups leading to better findings.
Flexible, meaning researcher can re-design their structure whenever they want
No preparation needed as such.

Disadvantages:

Time consuming
Not appropriate for statistical description of large population.
(Silverman, 2006)

Reasons for taking up both qualitative and qualitative approach

As we can see in the advantages, it is cheaper as compared to quantitative research.

(Silverman, 2006).
Would help in providing statistical evidence for the topic.
Would help in getting more information, providing more data.
The questionnaire has some close-ended questions, making it quantitative.

The advantages of choosing direct face-to-face interviews or personal interviews are:

1

Face-to-face direct interviews are more flexible as the interviewer gets the opportunity to
create a personal rapport. Also, as the research being qualitative, more and more information

is easier to collect through a personal interview.

A lot of information can be collected with the help of interviews (Mathers, Fox and Hunn,

3
4

1998).
Free from errors. (Mathers, Fox and Hunn, 1998)
The interviewer can help the interviewee understand the question, if he/she is unable to

understand. (Opdenakker,2006)
Convenient for the respondent, especially in their home or store. (Opdenakker,2006)

The limitations of choosing direct face-to-face interview are:

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Interviewees might feel uncomfortable about the anonymity of their responses. (Mathers, Fox
and Hunn, 1998)

Respondents may not feel encouraged to provide accurate or honest answers.

Costs time (duration of fieldwork) and money. (Mathers, Fox and Hunn, 1998)

Surveys with closed-ended questions may have a lower validity rate than other question
types. (Opdenakker,2006).

Interviewees may not want to answer the questions due to lack of knowledge or even
boredom. (Opdenakker,2006).

Sampling Design

The study conducted would make us of purposive sampling which is also known as non-probability
sampling. This type of sampling does not involve random samples Socialresearchmethods (2006).
This type of sampling is taken up when the researcher has a pre-determined sample population in
his/her mind with a specific focus. In purposive sampling, the researcher can validate the test with a
known population which is one of the uses of exploratory research Crossman (2014). This type of
sampling is being used in this research because the sample represents the retail clothing stores in
Liverpool city centre. The main focus of the research is to know what are the various impacts of
change in stock or various factors that have an effect on the stocking decisions of organisations in the
retail clothing industry. Therefore, purposive sampling would help the researcher compare between
the high end and low end brand. Also, the researcher would be able to know how low end brands
make their stocking decisions as compared to high end brands. Samples are usually smaller in a
qualitative research than those in a quantitative research (Brikci and Green, 2007).

Sampling Unit:

The study aims at surveying people who are either the managers or employees who have the
authority to make stocking (changing stock) decisions in the stores.

Sample Size: 6 managers or employees. Due to time and money limitations the sample size
has been kept at 6. It would be easier to analyse data of 6 respondents than compared to a

larger sample size. Also being a qualitative research, the sample size is smaller.
Targeted group are the people who have the authority to make stocking decisions, so that the

results match the research topic.

Sample Area Retail stores in Liverpool City Centre, Liverpool, United Kingdom and retail
stores in St. Johns Mall, Liverpool.

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The sample contains of three high end brands and three low end brands, so that it is easier to
compare data between the two sectors of the industry.

Rationale of The Study

This study will definitely be of use to organizations, customers and educational institutions.
Organizations will get to know about how different high end and low end brands make their stocking
decisions and how does this affect their sales and revenue. Also, the retail clothing stores would
analyse as to where they are lagging behind and hence take decisions accordingly. Also, the low end
brands could learn on how high end brands operate and how they make stocking decisions and
survive in this highly competitive market. Educational institutions can encourage students to research
on this topic as it is less researched upon, and there is very much possibility that the research would
definitely give out broader and more reliable results. Also, the consumers would be aware of how
their brands make their in-store decisions and if they are being exploited or not.

Consent

Keeping in mind the ethics of the study having consent of the respondents is a must. Consent is
basically the agreement of the respondent to take part in the personal interview.
Confidentiality: The personal and stock information provided by the respondents has not been
disclosed. Complete confidentiality has been maintained. The conducted interview information will
be used for reference purposes only and will be removed after the completion of the research project.

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4 FINDINGS AND ANALYSIS

1

Introduction

This chapter aims to achieve the objectives set at the beginning of the study by critically analysing the
quantitative and qualitative data through the interviews conducted from the various respondents. The
data collected through interviews has been analysed and the interpretation has been made keeping in
mind the literature review and objectives set at the beginning of the research. This chapter presents
the data analysis that is based on the 6 interviews of managers or employees of clothing stores in
order to answer the research questions set out in Chapter 1. Also, the difficulties the researcher came
across in course of the study or limitations of the study would be listed out.

Findings

ZARA

This interview was conducted with the deputy manager of a high end clothing brand. He had been
working in this organisation for the four and a half years. He is a young man within the age group of
25-30 years. He has had an educational background of around 15 years. His main job in the
organisation is to transfer stock and look after at the stock coming in and going out. He also has to
manage all the employees in the store so as to retain customers and also to provide the highest
amount of satisfaction to their customers. The main target market of Zara is womenswear. Even
though they have something for everyone like for men and kids, their main focus group or the target
market is the womenswear. One of the main reasons for changing stock is the seasons. As a store in
Liverpool the weather is quite unpredictable, therefore that makes a lot of difference in the stocking
decisions. The manager also spoke about how catwalk played a role in determining their stock. Their
most popular selling products were the t-shirts, denims and jackets in all three sections that are men,
women and kids. The manager had also described how change in stock or new arrivals would help
them increase their profitability and earnings. When asked him about discounts, he was very much
against the discount policy and was like the company hardly gave any discounts. The brand doesnt
even believe in stock clearance policy as they keep their stock for long even when the new stock has
arrived. When asked about the autonomy he had over changing stock and prices, he replied saying I
do not have any authority regarding the prices and changing stock, everything is done and decided by
the head office, we just have to follow orders.

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HUGO BOSS

The second interview was from the assistant manager of another high end clothing brand who was
quite confident and was keen on providing any information I wanted. He fell in the age group of 3035 years and had an experience of seven years in retail clothing (Hugo Boss). He has had an
educational background of 20 years now. His main work in the store is deal with the customers; train
the employees on how to treat the customers, various other operations like stock management and
also taking care of sales. One answer that was quite surprising was that their brand had no such effect
of competition on their stock. The manager described that the brand name does it for them. Hence
forth competition was something which was not a major factor that would help them redefining their
stock. When asked what their most popular product was, he said There is no such popular product,
but one of our strengths is the suits. He also said that there is no target market or a focus group; they
had something for everyone of which mens wear was more popular. He also said that the
womenswear sales were increasing at higher rate. They also experience a high amount of profit when
the new stock comes in. in the managers words Whenever new stock has arrived, it just goes off
very fast which increases our sales. Talking about discounts, he said discounts would definitely
increase sales, though the company doesnt usually have sales. The company does have end of
season sales, but they do not opt for the stock clearance policy as it could affect the brand image of
the company. Like Zara, Hugo Boss manager doesnt have the authority or the autonomy to control
the stock and prices of the various products; its all done by the head office.

AMERICAN APPAREL

The next interview was given by a young lady working in her late twenties. She is a shop assistant in
one of the stores of the brand in Liverpool. She has been working here for almost 9 months. Though
not that experienced, but was quite confident in what she was saying. They change their stock
according to different seasons apart from the regular weekly change. Their main focus is on the
younger people and the teens. They also target people in their twenties and early thirties. One of their
main selling products is the denim shorts for both men and women. She further said that the denim
shorts for women was much more popular and was still growing. Like other high end brands, this
company wasnt much affected by competition. Being an American company, all stock is brought
from the United States of America, and hence is a very famous and popular brand among the younger
generations. Its a sweat shop free brand, meaning the company does not indulge in exploiting the
people involved in making the brand products, which in turn helps increasing sales and brand image.
As she is a shop assistant, she did not have much idea about the profitability difference when new
stock has arrived. When asked about discounts, her answer was we do have discounts for students,
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and also employee discounts for employees working in Liverpool One, other than that they dont
really believe in discounts. They dont opt for stock clearance policy unlike the other stores in an
around their store. They like to keep their stock for a longer time as they think that their product cant
become obsolete and hence prefer keeping old stock rather than opting for any stock clearance policy
or discounts. Being an American company, it gets all its orders and stock from the head office in
America and hence they dont have any autonomy or authority over the prices and stock in the store.
They have to follow the instructions of their bosses.

ULTIMA MODA

The next interview was again given by a lady in her late twenties managing a low end brand store for
the past five years. It is part of one of the various stores in St. Johns mall, Liverpool. She had an
experience of five years and was currently a studying manager. She also said that the owner of this
place had six more stores in the same place with different names and different products. Although
this store was only for women, but their main target market are men and women (keeping in mind all
the six stores). When asked if season played a role in changing their stock, her answer was yaa
seasons do play a major role in determining our stock, in fact we change according to the different
seasons, summers and winters being the main ones. As there many clothing stores in the mall, she
described that competition does have lot of effect on the stock they portray. The most selling or most
popular product for them was the women tops, which had high demands as described by her. One of
her main reasons for sales was the display stock. She believed that the stock displayed inside the
store were the main reasons to attract more consumers and increasing sales. She also said that
whenever the new stock has arrived, it has significantly helped in increasing profits. She also
emphasized displaying new stock would in turn increase profits. The store also provided discounts on
a regular basis, which would definitely show an effect on the sales of the organisation. They do opt
for stock clearance policy at times, but not always and not for a longer period as the consumers may
get a bad intention about the brand. But, at times it has to be done due to the pile up of stock. When
asked about the autonomy to change stock and prices, her answer was I am allowed to change stock
and give discounts for like one or two pounds, depending on what the customer is buying. It also
depends on the seasons, where there is chance of high sales, the manager is more willing to give
away discounts and vice versa in other situations. It also depends on how much a customer is buying
in terms of quantity and amount.

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DIRECT DESIGN

I had the privilege to interview the owner of the store of the next brand. This is another small scale
brand in Liverpool. The owner has been in this business for the past twenty five years. He is 43 years
of age and has quite a lot of experience of the things around. Like the other brands, his stock
decisions also had an effect of the competition around him. This store sells Menswear mostly. So the
most popular/ most selling product is Menswear shirts and t-shirts. Change in stock does affect the
profitability, not to a very high extent but its considerable. Its on a medium level as said by the
owner. When asked about discounts, he said we do provide discount on a regular basis, which have a
positive impact on our revenue. Our main USP is that we give an above average quality at a lower
price. The store also opts for stock clearance policies and also do have seasonal sales. Being the
owner of the store, he has full authority to determine and change the stock according to the customer
demand and also give immediate discounts to people who are buying in bulk.

STORM

The sixth and the final interview was taken from another unbranded store in Liverpool. I was lucky
enough to get the interview of the managing director of the store. He has been working for the past
twenty two years, managing the same store. The main target market is the menswear. This store had
another branch with womens and kids section. The store stock was affected by the competition
around them. Their main selling products or the most popular product was the shirts and trousers for
men. They also sell accessories like belts, sunglasses, etc. One of the most unexpected answers was
I see my profitability going down when any new stock has arrived. Compared to all the other
interviews, this store manager did not find an increase in his stores profitability. The store believes
in giving away discounts which help in finding clearing the stock and increase the sales of the store
as a whole. Like the other unbranded small stores, this store also improvised the stock clearance
policy. They also give summer and winter sales to increase sales. As the managing director of the
store, he has full authority and power to change the prices and stock of the store according to the
market demand and needs.

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Analysis

The questionnaire also included some close ended questions, making it easier to analyze some of the
responses graphically.

HOW OFTEN (ON A WEEKLY BASIS) DO YOU CHANGE YOUR STOCKS?

0-1

1-2
2-3

3-4

4-5
1

This graph shows how often various branded and unbranded stores change their stock on a weekly
basis. As we can observe, mostly all the clothing stores get a new stock or there is a change in stock
every week. Mostly the unbranded stores have a change in stock every week, whereas the higher
branded stores have a greater time span in changing their stock.

WHAT ARE THE MAIN REASONS OF CHANGING STOCK?

Price

Competition
Fashion

Seasons
Market Demand
5

The interviewees were asked to choose two of the various options for reasons behind changing their
stock. Majority of branded and unbranded stores were affected by seasons and the fashion trends
25 | P a g e

prevailing in the market. In fact, few of the stores had seasonal sales, to increase their profitability.
Two unbranded stores also took competition as their main reasons for changing their stock.

DOES COMPETITION AFFECT YOUR STOCK?

4.5
4

3.5
3
2.5

TOTAL

1.5
1
0.5
0
Yes

No

The store managers were asked if they were affected by the competition around them. Two of the
higher brands were hardly affected by the competition. They believed that, competition had no role
to play in deciding their stock. Whereas, the unbranded stores were highly affected by competition,
and had to change stock frequently and give away discounts. One of the branded stores also were
affected by competition around them.

WHAT ARE THE MAIN FEATURES OF YOUR COMPANY THAT ATTARACTS CUSTOMERS?
1
Brand Image
Prices
3

Display Of Stock

The interviewees were asked as what were the main features or strengths of their stores that attract
more customers. Half of the stores chose brand image to be the main reason for attracting consumers.
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One of the three stores was unbranded. Another two stores explained price as their main competitive
advantage to attract more customers. And one of the stores also thought that the stock displayed also
helped them attract more consumers.

Measurement of change in stock

All the interviewed managers and employees were asked to give out the main reasons for changing
their stock. The following factors or components had emerged:

Competition
Seasons
Fashion trends

Competition: As depicted in the graph above, most of the branded stores were unaffected by the
competition around them. Whereas, the unbranded stores took competition as one of their threats, of
which some of them have stated competition as one of their main reason for changing stock.
Seasons: One of the major roles to play in stock decisions of both high end and low end stores was
season. This is a very common response as; people would not prefer wearing winter clothes in
summers and vice-versa. The case would be different in countries where there is not much climatic
change.
Fashion Trends: Another major reason of changing stock was the prevailing fashion trends. Even
fashion trends had shown an equal weightage along with seasons for making stock decisions (As
shown in the graph). This depicts how fashion plays a role in store decisions, and how they take their
decision about stocks keeping in mind the fashion trends.
Limitations:
There were a few limitations which the researcher had to face which included:

Managers and employees were not willing to disclose their stores information.
Respondents were not describing or giving information in full detail.
Employees did not have an idea about the performance of the store in profitability terms.
Respondents were reluctant or uncomfortable to answer some of the questions, meaning one

word answers.
Open ended questions generated large amounts of data, and hence it proved to be time

consuming.
Also, it was a bit expensive and tiresome, as the respondents had different timings of
convenience.

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In spite of the limitations listed above, the research was conducted in a legitimate and efficient
manner.

Biasness

None of the research conducted above has been reached to a pre-determined or known result. The
researcher in no way was biased while conducting and analysing the research.

CONCLUSIONS

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Introduction

This chapter helps us to discuss the findings which were attained from previous chapter. The
literature helps us to analyze and determine the findings in the previous chapter. The chapter will also
emphasize on the importance of the topic and its use in the physical world. Also this chapter would
help in answering the research questions mentioned in chapter one. Also it will highlight some of the
limitations while conducting the study. And finally this chapter will also lay down some
recommendations for future study on this research topic.
2

Conclusion

The research topic chosen was relatively new and no study or any kind of research was previously
done on the topic which is What are the various impacts of change in stock in the retail clothing
industry?
According to the analysis in the previous chapter, it can be observed that there are three most crucial
reasons for a retail clothing store to change their stock. These three reasons are competition, seasons
and fashion trends. As shown in the graphical presentation, five out of six retail shop managers were
mainly affected by seasons and the prevailing fashion trends in the market. It was also observed that
competition also has an effect on changing stock.
One thing which was common in all the stores, be it branded or unbranded was the seasons. Seasons
are the main reason for making stock decisions. The stores have summer and winter sales and a
different stock in both seasons. Not only this, some stores also portrayed different stock for smaller
seasons like autumn and spring, so that the display in the store is more attractive and more and more
customers are attracted. Therefore, it can be concluded that seasons are one of the main reasons to
make stocking decisions in the clothing stores other than fashion trends and competition as discussed
above.
Stocking decisions are also based on the type of stock the store portrays. The frequency of stock
change also has a huge impact on the stocking decisions of a retail store. The graphical presentation
in the previous chapter depicts the frequencies or how often the stock is changed in various branded
and unbranded stores. The results show that most of the retail stores change their stock on a weekly
basis, which means customers have something new to buy every week. Whereas on of the branded
stores changed their stock on a monthly basis. Rest two stores change their stock between one to two
weeks.

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One more thing which emerged between the stores was the role of E-commerce. The unbranded
stores were very much looking for opportunities and new talent to expand their businesses into the Ecommerce world. Whereas the branded store already have an established goodwill in E-commerce.
They had their sites with online shopping which was not the case in the unbranded stores. The
unbranded stores wanted to enter into E-commerce so that they could expand and increase their sales.
One thing which was found to be different between branded stores and the unbranded stores was the
level autonomy. The managers and the employees of the branded stores have no autonomy about
discounts, stock clearance and changing stock. This was not the same in the unbranded stores. They
had full autonomy to give away discounts and clearance sales according to the stock they have. They
could also give on the spot discounts to customers who are probably buying clothes in bulk. They
also believed that displaying stock also helped in increasing their sales profitability. Also, goodwill
of the branded stores was one of their main reasons to attract customers, whereas the unbranded
stores emphasized on cheaper goods that is price was their main quotient to attract customers.
There were some obstacles faced by the researcher while conducting the research. One of the main
problems while conducting the research was that, the stores were either not ready to share their
information or were quite uncomfortable in disclosing their information. Also, the researcher was
prone to get many one word answers, even though the research being a qualitative one. Also, there
was not much literature found regarding seasons role on inventory management.

Recommendations

There is always a need or scope of further research. Here are some suggestions and recommendations
for retail stores, individuals and educational institutions. The retail clothing stores can have an idea
about the stocking decisions made by stores around them or their competitors (branded and
unbranded). Future research should emphasize of gathering more information regarding the changing
stock of retail stores. Being a qualitative research, the sample size chosen was quite small, hence, it is
recommended to the other researchers to go deeper in to this topic and gather more data for better
understanding. For companies, they will get to know that seasons and fashion trends are the main
reasons for them as well as their competitors to change stock. It is recommended for the future
researchers, to research further on this topic emphasizing more on seasons and fashion trends to
come up to a more specific conclusion. The researchers are advised to look more in to the Ecommerce world and how does that effect the stocking decisions of the retail stores. Researchers can
30 | P a g e

research more on the role of seasons in the clothing industry, to determine better and more reliable
results.

Appendix

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Questionnaire
1. What is your name and what role do you have in this organisation?
2. For how long have you been working in this organisation and at what position?
3. How often do you change your stock?
0-1 weeks
1-2 weeks
2-3 weeks
3 or more
4. What are the main reasons for you to change the stock?
Price
Competition
Fashion Trends
Seasons
Market Demand
Other
5. What is your target market?
6. Do seasons play a role in the change of stock? Why?
7. Does competition affect the stock you portray?
Yes
No
8. What is your most selling product?
9. What main features attract customers?
Brand Image
Price
Display of stock
Others
10.How much difference does it usually make when there is a change in your
stock? (in profitability terms).
11.Do you believe in discounts?
12.Do you opt for stock clearance policy when the new stock has arrived?
13.Do you as a retail clothing store have the full autonomy to change the stock and
prices?

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