In light of profit warnings and a share price decline of clothing retailer Next, CEO Lord Wolfson attributed the uninspiring performance to a general decline in consumer spending of fashion due to a shift towards more experiential consumption. We did an exploratory analysis to understand whether a shift in consumer spending is actually responsible for Next’s negative performance or if there are other underlying factors at play.
Have a look at our report “Next Business Analysis – The Wolves are at the Door for Fashion Retail” to see what we found out.
Research Methodology / Data Sources:
We used public national consumer statistics from the ONS about consumer spending trends to analyse the level of increase in experience-based consumer spending and verified our results by comparing it against other consumer survey data from Google, Deloitte and Greene King; all of which corresponded with the ONS findings, supporting our data source. We also identified alternative explanatory factors for Next’s performance decline, such as consumer sentiment regarding clothing quality and fashionableness, and whether a shift towards online shopping might be detrimental to this high street stalwart. Analysis of quality and fashion-related consumer attitudes towards the brand through social data did not provide a substantial explanation. However, we were able to identify the efficacy of Next’s online presence as a potentially causal factor by looking at the volume of Next related google searches and the number of relevant organic mentions the brand had on social media compared to competitors.
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