Unit 15: Investigating Retail Business
Learning Aim C: Examine the importance of the supply chain and stock control
management to the success of retail business
C.P4: Explain how the process of distributing goods through different channels
from manufacturer to customer differs in two businesses
Chosen Business 1 – ASOS
Asos offers their consumers a wide range of products such as clothing, gifts, face and body products, accessories and
more. The company uses a direct marketing distribution channel. This is the simplest type of distribution channel
and does not involve any intermediaries, only the manufacturer and its consumers.
This method enables ASOS to have full control over all their distribution channels and all their marketing activities.
This includes marketing their products directly to their customers which they currently do through their website,
their app, social media platforms and more. This distribution method is best suited for Asos as they do not have any
brick-and-mortar retailing stores and their business all depends on e-commerce.
There are many advantages and disadvantages to this method including:
Advantages Disadvantages
- Ability to build relationships with their - Company will need to conduct all planning and
consumers organisation themselves, this can be time
- Collect data on consumer buying habits consuming and complicated
- Reduce distribution costs and avoid splitting - Costs will be high, especially considering there
profits with a third party is no third party involved
- Send products to consumers faster - Company may need to rent storage spaces,
- Respond to customer feedback and product licence vehicles, employ more workers and etc
performance
As they company ships to 239 countries worldwide, it is important for Asos to be organised and have very strong
established distribution channels for multiple reasons – an important one would be maintaining their brand image
and reputation of offering consumers a convenient, fast, reliable retailer to get clothes, accessories and more from.
Asos’ main distribution warehouse is located in Barnsley, Yorkshire UK. It is operated by the company’s partner XPO
Logistics and currently employs over 4,000 people. It is over 450,00 square feet and has a capacity of 22M units. The
company also has smaller warehouses in locations such as Berlin, Ohio, Poland, New York and more. These
warehouses make it easier for the company to get products to their consumers quicker around Europe, the US, and
many other places worldwide. Below is a picture of the company’s main warehouse:
In relation to after sales service, Asos updates the customer regularly including order confirmation, order
dispatched, delivery day and time, free returns, and customer feedback. In these emails Asos also includes all the
necessary contact information for customer support to let the customer aware of how to contact them if there are
any concerns or problems.
, Chosen Business 2 – Card Factory
Card Factory is a very popular UK based company who retails greeting cards, balloons and gifts for all ages and
different types of events/celebrations. Card Factory uses the distribution channel of Producer-Retailer-Consumer.
This means that Card Factory sell their products in company stores, online and also to big retailers/ wholesalers who
buy in bulk and then sell the products onto consumers. An example of a retailer that Card Factory partners with
would include Amazon.
This type of distribution channel suits Card Factory as their products do not need to be bought frequently and last
for a long period of time.
There are both advantages and disadvantages to using this method such as:
Advantages Disadvantages
- Makes it more convenient for consumers to - Consumers might have to pay higher prices to
purchase products ensure the intermediary also makes a profit
- Makes it easier for producers to distribute their - Poor customer service could reduce sales
products - Products are side-lined
- Provides logistics support - Profits must be shared with all parties fairly
Card Factory signed a 5-year contract with Expect Distribution. This deal will involve Expect Distribution handling up
to 100,000 pallets to be distributed to card factory’s 950+ retail stores.
As shown the left, Card Factory’s head office is located
in Wakefield, West Yorkshire. In addition to this
during the national lockdown in May 2020, the
company opened a second new distribution centre in
Wakefield. This was so that the company was able to
keep up with online orders during lockdown whilst
maintaining social distancing laws. The company
stated that the website sales increase by 267.5%, and
in addition to this the company’s Getting Personal
Brand gained a 57.5% increase in sales after all
physical stores closed at the beginning of lockdown.
Furthermore, due to the increase in demand of online sales, the business decided to adapt to these trends. The
company then relaunched their website in August 2020 to make it more user friendly and a new feature that allowed
consumers to create and order personalised cards and other gifts. Later on in 2020,the company launched mobile
apps for both Apple and Android devices to improve conveniency for customers.
C.P5: Investigate the impact digital technology has on the retail and logistic
processes of two contrasting businesses
Business 1 - ASOS
XPO Logistics has been partnered with ASOS since 2013, this partnership is what built ASOS’s reputation for fast
delivery service times. The logistics sites are ran by around 4,000 workers. The work conducted has been so effective
that the ASOS warehouse in Barnsley, South Yorkshire has received countless accolades for colleague well-being
operational excellence, workplace health and safety and more.
