Introduction

The retailing world is the main conection that brings together two key
groups which are customers and manafctures this report sets out to find
the impact that river island has on the retailing world and inperticular
anaylizises its retaling operations and tactics
When try
River island sets its self in the clothing industry inperticular focusing its
self on the female segment but also penetrates others. When a business
desides to operate in the retailing industry their are four key
fundermentals which it sets out to . providing an assortment of products
and services , breaking bulk, holding inventory and providing service
Within this report you will be able to understand the way it expolites its
current resources and postion in the market to undertake this taks to help
the business reach its goals .
They have adapted a forward intergration by which they manufacture their
own lines and are responable for the retaling activities .this is like the
similitude of Ralph Lauren

Section 1 The Retail Enviroment SWOT PESTLE

SWOT Analysis for River Island
Helpful
Harmfull
Internal
Strengths :
1.
innovation
2.
pricing
3.
unique products
4.
Strong financial position5.
Weakness :
1.
Economic Change
2.
Change in season
3.
Not diversified4.
External
Opportunities :
1.
Product expansion
2.
Expansion
3.
Acquisitions / joint ventures
4.
Online
Threats :
1.
Product Substation
2.
Price wars
3.
External changes
4.
Economic slowdown
5.
Competition

Innovation River Island, being one of the largest retailers in the high
street clothing market, gives them a competitive power over other
retailers such as TOPSHOP, ZARA and H&M. Being such a innovative
retailer, gives River Island a chance to differentiate its self. They have
used various innovative methods such as endorsing celebrities or famous
designers to design a range for them. In 2012, Global pop star Rihanna
agreed to design a line for River Islands Spring 2013 collection.
Furthermore River Island boasts of its specific designing team which use
innovative methods to create the next new thing
Pricing River Island are devoted to providing their customers with the
highest quality goods and at affordable prices. Pricing is one of river island
biggest strengths in terms of competitive strategies. Pricing is one of the
key reasons river island are so successful in the retailing market and
having been around for many centuries starting in 1948 has given river
island the power to negotiate prices for raw materials . Furthermore as
they have been around for many years it has meant that they have had
ample of time to gain long term resources such as their own
manufacturing plant which has helped them to improve their financial
positioning
Unique Products - the benefits of shopping at River Island is knowing that
you have bought something that is unique and cannot be bought at any
other retailer This is down to the reason that river island have a team for
specialist designers which design clothes for river island that have never
been seen before and have not been sold anywhere else. This is such an
attractive feature that customers see when shopping at River Island as
they know that no other store will be selling this jacket or dress anywhere
else. This strength goes hand in hand with innovation and are dependent
on each other
Weakness
Change in season change in season is a big problem that river island
face as the rise in global warming and the change in season it is hard for
river island to predicted what the weather will be like next month. In
recent time the winter season was colder than ever and stocks for the
winter line shot off the racks quicker than ever, being in spring the
designers have brought out the new collection of cloths in store yet it
being still cold outside. Customers coming in to the retailer finding out
that the winter jacket and clothes are gone and the spring line being out
the customers not buying the spring line as its still cold outside and the
winter clothing has been sold out and out of fashion. This is a big problem
the retailer is finding as stock is not being sold and been left on racks just
too been thrown away.
Economic Change the change in the economy has a huge impact on
River Island as there is no way in determining which way the economy will
go if the economy goes down then the prices in materials would go up. For
instance in recent news the price of cotton has risen by 13%, sudden
changes in the economy like this draws river island to spend more money
than having to put the prices up in store which will draw customers to
competitors.
Opportunities
Online positioning with the World Wide Web being used so much more
especially for shopping it has given retailers a opportunity to move into

this market. Although river island have already situated them selfs in this
market they can still utilise media websites from Facebook to instagram .
Acquisitions A great opportunity for River Island to grow in the market or
even a qnew market is to consider an acquisition of a company in the
proposed field expand is that they start a corporate action by buying most
or if not all of a company and making it their own.
Expansion currently River island has 300 plus stores in the UK, Poland,
Ukraine, Republic of Ireland, Belgium, Georgia, the Middle East and more.
In regards to expanding it can be summed into two key categories
Expansion into new markets
River island have the chance to start operations in new locations such as
china .With its growing population it gives river island a chance to exploit
the market
Expansion in number of stores .Currently they have over 300 stores. When
a further look into the location is done it is highly obvious that there is a
big potential for them to expand just within the current markets they are
in at the moment .
. Product expansion
River Island should look to improve their product backlog by expanding
their business in to different markets.
Threats
Competition / price wars - competition is a big threat for river island as
their riveraly are increasing every day in numbers but also the prices
available are getting lower, fashion trends are rapidly changing, therefore
making it hard for river island to keep up to date with what is in and what
their competitors are selling. River Island are constantly having price wars
with its competitors TOPSHOP and ZARA to increase sales .
Economic slowdown an impact on the economy results in a trickle affect.
This impacts river island directly as prices for raw materials might
increase. But furthermore the key In any economic shift results in the
expediter of people. When the economy affects peoples income then they
are less willing to spend in shops such as River Island as people become
even more price concienious. The previous recession in 2011 saw River
Island decline its pre-tax profits by just under 25%
External changes the change in the government or policies in the
environment that the retailer works in could have a catastrophic effect on
the retailer as changes in law or tax policies could change the way River
Island does business. As the smallest law that could change could change
the way the retailer does business and hit the profits that are made.

PESTLE Analysis
Political
There are many external influences that affect River Island such as
political issues such as tax policies that have been changed
,
government organisation attitudes change to the rapid growth in profits
and business growth. The stability in politics is no longer secure which
keeps river island cautious on growth and big investments that may be
made and finding them selfs no longer investing due to the investment
risks.
Economic
The economic issues that river island have to look over in order to grow
are economic growth, government spending and taxation. As the economy
is in a recession, company growth is at a low river island cannot afford to
lose out on investments made in to other firms due to the lack of
resources in the economic which river island would find a loss in. as
government are not spending money on organisation that are helping the
economy river island find that this discourages them to go ahead and
invest in the country and are finding them selfs moving to other overseas
locations which is harder to work in but better for profits. With taxation
raising this effect can bring profits down as less is being earned and more
is spent on good that have raisin due to tax going up.
Social
The social affect that river island faces are customers lifestyle change,
work and career leisure attitudes, education and fashion hype, with career
and work attitudes this affects River Island as with the increase in job
movement with employees river island find that their employees come to
work for the retailer for a number of months but then move on to another
job. Which for River Island is an issue due to finding new staff is a lengthy
and costly process which is hard to go down for the retailer where they
would prefer to have employees that stay for longer. As river island look
for young and enthusiastic workers but find that they are staying in
education for longer to get degrees and master to move on to graduate
jobs which they would rather have them working for them. With the new
fashion trends that come out every week it is hard for the retailer to stay
on top of the new fashion hypes which could lose sale to other
competitors.
Technological

There are many technological issues that affect River Island externally
such as government research in development in new technological, new
inventions and development, energy uses and costs, change in
information technology and internet and change in mobile technology.
Legal
Not working in compliance with the law can bring the retailer in a lot of
distress as consumer and employees can bring forth a law suit against
them if contracts and terms and conditions have not been made or met.
Consumers are protected from business by the consumer protection act
1987 which protects consumers from 1.defective products 2. Safety of the
product and 3. Giving a misleading price indication, if River Island are not
careful with these compliances then customers are well within rights to
sue the company under this act. River island are also venerable to law
suits made by employees if there need are not met by the Employment
Act 2008 which states that employees should receive minimum wage and
any disputes should be dealt with fairly.
Environmental
river island find that if they do not compile with rules and regulations such
as recycling using less resources in which it concerns the environment
they can find that there would be a drop in sales, due to customers that
finding the environment a great deal of importance which may change
their mind of not shopping at their stores, because river island not helping
out with the environment, this would lead to drop profit and loss in
customers satisfaction which is not good in the medias image which could
lead to even more customers not shopping with them and having a great
deal of effect on them.

Section 2: Retail location

Source: legacy. (2011). factors influencing location

The importance of location
The location of a business can have substantial effects on its brand image,
sales, profitability and performance; therefore businesses usually try to
locate whether is close proximity to its customer base which provides the
maximum competitive advantage. River Island has its flagship store
located in Oxford Street, at their primary location, and the chains largest
store, therefore holding the highest volume of merchandise. This portrays
the River Islands brand image, in terms of their quality products and its
existence in highly competitive environment.
River Island aims to locate its stores near/in shopping centres and highstreets whether is a great footfall and traffic of pedestrians and vehicles,
therefore more consumers are most likely to stop and shop, which not only
make it easier and convenient for customers to access, but also allows
River Island to respond to customers needs and wants more quickly and
efficiently. In addition the location characteristics such as parking and
visibility are also in favour of River Island. For example most of the stores
have close proximity to large car parks and the stores are highly visible
due to their unique signage and shop-fronts. The availability of car parks
increases consumer access to the store and eventually leads to higher
traffic and sales.
Moreove, other factors such as land cost, transportation, competition,
technology, demographic and recession collectively influences River
Islands decision on location of its stores.
For instance locating its stores whether is a high level of close competition
will lead to price and cost reduction strategies in order to retain its
customers. This will not only limit the influence they have over the market
but also affect its overall profit levels.
Maps and detailed data on the importance of geographical location
Index: 1
Source: maps.google.co.uk
The above map shows the sites where most of River Islands stores are
located throughout United Kingdom. It is clear that most of the stores are
clustered together in highly populated areas, namely London, Manchester
and Liverpool. As River Island provides stylish and affordable fashion
clothes, they prefer to have access to customers with higher income or
disposable income, in highly populated and most importantly areas with
higher employment status such as London. Therefore there are higher
chances of success and sales in such areas which are highly populated
with higher employment rate, so that more customers have more money
in their hands to spend, which eventually reduces the risk of becoming
absolute, instead increases the chances of being competitive and
profitable.

Index: 2
Source: maps.google.co.uk
Index 2 shows how River Island has created a close cluster of stores in the
inner city of London around River Thames. This is because these areas
attract an immense amount of traffic i.e. pedestrian footfall and vehicles,
consisting of tourists, local workers and residents as well as people from
across UK. In addition River Island tries to promote its existence by having
more stores in these expensive locations, therefore fashioning competitive
advantages over its main rival such as M&S, M&M, and Zara.
The rise of multi-channel opportunities and the synergy between various
brand points
A retail channel is the way a retailer sells and delivers merchandise and
services to its customer, Levy & Weitz (2012).
The constant change in retail environment is partly due to the
advancement in technology, change in consumer behaviour and the
present economic downturn. Consumers are continuously looking for new
ways to shop, such as searching and purchase products online (e-tailing),
instead of the traditional view of shopping in store. However this might not
be true for all types of products because some consumers prefer to touch
and feel the product for the sake of risk reduction.
River Island continuously tries upholding the use of multichannel retailing
in order to exploit the unique benefits from each of the opportunity. In
specific, they benefit from electronic and store channels, which are
believed to be the most important channels, leading River Island not only
to gain a competitive advantage but also a success in fashion industry.
The benefits of each channel
Store channel provides numerous benefits to consumers which cannot be
provided by other non-store a channel i.e. catalogues and personal selling.
For example River Island mostly sells fashionable goods (footwear,
outwear) which consumers prefer to try-on before making a purchase for
the sake of their satisfaction. This means that buying clothing online might
not meet consumers expectation or taste, however e-tailing can be
beneficial as it will provide a mean for promoting goods and providing
consumers with product details and more suitable facts for assessing
merchandise and providing the services more cost-efficiently.
River Island should consider using a combination of channels in order to
overcome the deficiencies of each channel, so that they can better satisfy
the needs and wants of its customers by offering them with more benefits
and better value. This in turn create a loyal customer base and repetitive
business purchases, which further increases River Island market share in
eventually profitability.
Section 3 Store Layout and Design
River Island aims to retain their customers as well as welcome new
customers is to keep them up to date with the latest fashion and trends,
however there are many other elements which attract customers to a

particular brand. One of these factors deal with the way in which River
Island create the perfect shopping experience for the customers who opt
to physically shop in the store instead of ordering the goods online.
According to the Centre for Retail Research, online sales in the UK in 2011
have boosted to 12.0% (50.34billion) of UK retail trade, increasing from
2008s8.6%
.
Although retailers like River Island have the online experience available
for their customers, it is still important to keep the in-store experience up
to a high standard. Attracting customers requires more than a great
ambience and good lighting in a store, there are many other unobvious
factors that work together to make the experience for customers an
experience worth staying for.
The layout that River Island has composed their shops in is the free form
layout which consists of aisles being laid out asymmetrically. The floor
space has not been filled out efficiently, enabling customers to freely
browse around without feeling trapped and restricted to look at one type
of item at a time, they are therefore directed, by the structure, to look at
the feature areas. The key feature areas in River Island stores are their
window displays which prizes of , usually, three female mannequins and
three male mannequins dressed in the latest seasons looks. There are
also mannequins dressed in hot picks, which are used to recommend
customers with looks they might want to try for the season, pop-up
shelves have shoes and handbags propped up so that customers can get
an idea of which accessories go together.
Signage and Graphics
Along with many stores, River Island uses graphics and signage to inform
customers. The types of signage that River Island uses are location
signage, category signage, promotional signage and lifestyle images.
Location Signage
In the stores, River Island displays a number of signs which direct
customers to the products they are looking for. For an example where the
denim is kept, the shoes, menswear, ladies wear and so on.
Category Signage
Within the different departments, there are products such as bottoms,
tops and shoes. River Island further guides their customers and simplifies
their search by displaying signs stating what type of products they sell. For
an example; womens bottoms come in a range of styles like denim;
skinny, super skinny, jeggings, boyfriend, bootcut. There are also options
such as disco pants, smart trousers and leather trousers.
Promotional Signage
Seasonal promotions are reminded to customers with signs displayed
along with the products. These signs include two-for-one deals on their
causal cottons and general seasonal promotions. Employees are trained to
ticket the products on promotion clearly so that customers can see which
sales are on promotion. The sale tickets are brightly designed so that it
attracts the attention of the consumer.
Point of Scale
The most important types of signage are the ones that inform the
customers of the prices of product. The River Island price tickets include
the product code, SKU code, price and barcode. River Island have taken

note that tickets fall apart when shoppers handle the items, so they have
devised a system so that the price can be found out without an exterior
ticket being attached to the product. A product code is printed on the
products, this code can be scanned into personal scanners, which is on
hand to all employees, the system will then tell the customer the price of
the product. Saying this, River Island have provided customers with useful
signage and also prepared if the signage had failed.
Lifestyle Images
Lifestyle images are displayed around the stores. With minimal text, the
customers can focus on the models of River Island modelling the new
styles, and ways in which the customers can piece the clothing together.
The vibrant images allow the customers to perceive an energetic, stylish
ambience about the store which collaborates with the upbeat music.

Featured Areas
The features areas are the most important, physical aspect of the River
Island stores. Customers will instantly be attracted to them, whether they
need the specific facilities or they are just drawn to the design. Featured
areas in River Island include their changing rooms; which are available
separately for men and women or combined together depending on the
size of the store, cash points; which also are available separate for men
and women depending on the size of the store. In the cashpoint area there
are add-on-sale sections where employees can probe customers to buy
concession items or gift cards, this process is part of the employees
standardized training. There are also features areas which are simply put
in place to compliment the stores ambience, these include; pop-up
shelves which are placed on walls with accessories like shoes and bags
as part of suggestions on how to match items together, mannequins are
also strategically placed dressed in recommended outfits; these are in
store and placed in the windows of the store. The window display of
mannequins is used as a tool to attract customers to actually come in to
the store, however once they are in, the mannequins inside the store are
used to give ideas to customers to make impulse purchases.
Planogram
River Island managers receive a store guide from Head Office; so that they
know which way they can lay out the store floors. The store guide helps to
distribute the merchandise on the floor, which products go on to the curve
rails, pop-up shelves, the mannequins. The benefits of the planograms,
is that it keeps stores tidy and organized as well as in tune with the other
stores around the country. This makes it easier for customers to familiarize

themselves with the merchandise in one store if they were unable to find
their size in another store.

Section 4 Product assortment & own branding

Product assortment consists of the line of clothing River Island may have,
or the collection of goods they may have in order to provide to the
consumers. Retailers may offer similar clothing and products but differ in
variety and assortment. River Island offer many clothing such as T-shirts,
sweatshirts, vests, jumpers, cardigans, jackets, and for
women
blouses, shirts, knee high boots and travel wear. River Island introduced
style inside, a new home for the hottest trends and style tips for the
consumers. The SKUs (stock keeping unit) available in stores are
dependent on the size of the store, the catalogue cannot usually
accumulate the stock thats available, for that reason customers may be
asked to come to the local store to view whether they have what they may
be looking for.
Services Offered
River Island have different services as well as products, they have a
service where they display their merchandise on a dummy to show the
visibility and demonstration of how that product looks, this allows the
customer to use all five senses to test the product when in use, this shows
a sense of trust and consumer value. River Island also provides tracking
and insurance with their delivery of products and they also make sure that
delivery is guaranteed. They also give free gif vouchers as loyalty
schemes if consumers spend over a certain amount of money. River
Island also allow other store vouchers to be used in the store such as
Love2shop vouchers.
Own branding
River Island entered into the market with the intention to create a vast
consumer base, they have done so with their brand due to this they were
able to make a lot of customers come to them rather than other
competitive retailers i.e. burton, top shop, Arcadia Group etc. River Island
has recognisable trends when they come out each season consumers will
recognise the brand based on the design of the product. So much so that

even retailers like Primark began to make similar designs which can be
mistaken as river Island products. add news on brand and designs
Choice Availability / Range of goods
River Island always bring new fashion to the consumers every season,
ready for summer 2013 river island are being represented by Rihanna who
is promoting many products and clothing lines to increase the consumer
base. They are known for their individual departments for kids wear,
menswear, and ladies wear for that they are able to target the individuals
according to age and sex in order to address their demands and meet
their potential needs and satisfaction.
Delivery options
River Island offers a delivery service when ordering from the internet in
November 2011 they announced that they will be delivering
internationally. This will broaden their consumer base and will allow the
customers to take advantage of the services they provide outside Europe.

Section 5 Retail Promotion

Retail promotion consists of particular activities intended to promote the
business in our case river island that do many things in order to promote
their business as well as their products
The promotional activates River Island engage in are through various
means, they allow other stores to promote their products and garments
such as an online retailer Asos, who sell River Island products, this helps
promote their item and allows the consumer market to be aware of their
marketing base and awareness. This is their form of multi-channel
marketing which are offering consumers more than one way to buy their
products.
The river island campaign have been a major consumer demand because
they have Rihanna promoting the company brand, so his has changed
trends from hairstyle and clothing. Rihanna has made a big impact and

have offered a new multi-channel distribution for the organisation towards

the consumer, their products and clothing line can be bought from other
online stores like Asos. The logo R for Rihanna is now the R for River
Island, this shows a strong responsibility and a sense of reliability on
Rihanna being a model and representative. This will make the consumer
base interested and curious about the new trends and clothing line that
may come into the season.
River island have a good corporate social responsibility which build
meaningful long term relationship with employees and their suppliers, this
is a good practise as it will allow the business to know what the
customers expectations are and can meet the needs of their demands.
This has been the main commitment and corporate social responsibility of
River Island.
Accessibility
River Islands Accessibility is very vast, in terms of stores they have many
branches located throughout Europe and Middle East, over 300 stores.
This shows how consumers can physically access River Island, also they
have online accessibility in which consumers can purchase online they can
reserve and collect online, also apps are available in order to make the
transactions safe and secure with a money back guarantee on purchases
that have not arrived this allows consumers to have a loyal relationship
with River Island and keep them satisfied.
Internet Channel
River Island also have international deliver, this show that they are able to
access their entire consumer base from the internet. The way they use
their internet is a big impact on the consumers and will give out any
necessary information needed about their brand new stock or seasonal
changes this is known as e-tailing. This is effective in the sense that many
customers will be kept up to date with the new stores offers and they may
even provide 10 off vouchers and codes through email which is very
effective in terms of customer loyalty and commitment. This method of
multi-channel retailing allows River Island to gain valuable insights into
their consumer behaviour buying patterns.
Catalogue Channel
Catalogue channel is a non-store retail channel where the store is
communicating with the customers through a catalogue mailed to the
customers. This is a very useful method for communicating, for example
half of the U.S consumers shop through catalogues each year. Levy &
weitz, p58 (2012). The effectiveness of this approach is safety and
convenience, consumers prefer to shop from a safer environment i.e. their
homes, in addition this also very convenient because they can place an
order from anywhere 24/7 or they can reserve and keep the product
secured. However, the disadvantage of making catalogues for River
Island is the related costs that involves, designing, printing, and
distributing to the customers. Also the response from the customers is
inevitable. Therefore, more reliance on catalogue channels can lead to
limited consumer base as this means reduced contribution towards
promotion of goods and eventually sales.
Direct selling
Direct selling is used by River Island in order to interact with the
consumers face-to-face to demonstrate what the trends are, what is in
fashion and what merchandise will meet the needs and satisfactions of the

consumers. This is a highly interactive method and is more likely to

produce sales through direct selling. River Island have a way where in
store they give advice and promote their products through dummies and
show how the clothes and accessories may look when they are being
used, from this consumers can have an idea on how they might look if
they purchase the same products. This is a demonstration method.
Store Channel
This provides many more advantages then non store offers can provide
such as touching wearing and demonstrating, River Island allow
consumers to try on the clothing to see whether it fits perfectly and
whether matches their taste. Catalogue and e-tailing do not have this
benefit as the products viewed on the catalogue or online are not tangible.
Perhaps the benefit offered by stores is the opportunity for customers to
use all five senses Levy & weitz, p61 (2012) this indicated the store
channel or direct selling has the most biggest advantage and is the best
method for consumers to purchase their products.

Section 6 Conclusion And Recommendations

From this report we are able to conclude that river island is a successful
retailing company due many factors but the key being in experience. Also
as they have been involved in the market for a long time it has allowed
them to grasp a big customer base. The expansion of River Island into the
mens and childrens department gave them more of an advantage
especially with economies of scale Although this does not mean that they
things right. when analysing their history we come across a few mistakes
or a few crucial points which could of be tackled in a different way
Firstly with regards to their endorsement of Rihanna .

Currently River Island use a partial integrated approach by which they

only take into consideration a few factors. We would recommend for river
island to adapt this integrated approach by including methods such as
extrapolation which will help to see them take a proactive approach to the
future prospects rather than a reactive one i.e. a rescission.
With this integrated approach they should only open on weekdays as this
is when they get a lot of foot traffic in comparison to weekends, only
shopping mall located shops should remain open. Furthermore we would
ask river island to consider a joint venture in a foreign country such as
china. The justification is that when a business moves operations to
another country it has two key strains. One is resources and the other is
financial. By conducting a joint venture with a small clothing company for
instance in china it will allow for river island to enter a new market without
all of the strain and all of the burdens on one company as it will spread
between both

Appendices

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http://www.love2reward.co.uk/gift-vouchers/redeemers/river-island-giftvouchers.jsp
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