Business Environment Assignment: London Fashion & AI Impact

Task 1: High Street Clothing Market in London: A Critical Examination

Introduction

High street clothes are another familiar segment of London’s clothing retail; they have been always popular among different populations and create job opportunities and enhancement of the internal market. Nonetheless, modern changes in the consumer market, new technologies and global economic environment substantially influenced the outcome of the market. As a result, this briefing paper critically explores the condition of the high street clothing market in London, and the analysis of the macro-environmental influences, as well as the macro-environment condition in the present situation.

Overview of the High Street Clothing Market in London

Figure 1: Audit of Digital Technology within High street Fashion Sector in UK

The high streets in London boast of various global brands as well as local trader selling different clothes. The apparel market in the UK was around £58.5 billion in 2022, while the London market played an essential role because it is a fashion capital of the world (Statista, 2022). Nonetheless, it is now threatened with change in consumers’ preferences, increase in online commerce, and the prevailing economic issues. Since the pandemic, the consumers’ return to physical stores has been relatively sluggish, and the foot traffic tapered off when consumers trend towards online purchases. In the year 2022 it is estimated that 41% of all clothing purchased in the UK was bought online (Mintel, 2022).

Macro Environment Analysis

From this analysis, one gets the impression that the external environment has a profound effect on London’s High street clothing market. Using the PESTLE framework, the following key factors are identified:

Figure 2: PESTLE ANALYSIS

• Political Factors: This decision has disrupted the supply chain, and firms importing raw materials have had to pay for the additional expenses which affected the retailers selling imported products. Also, the government has enforced environmental friendly policies this put pressure on retailers to embrace sustainability.
• Economic Factors: Inflationary pressures, which were at their highest in the year 2023, have lowered the purchasing capacity of the consumers, which in return affect the luxury consumers’ spending on apparels. According to Reuters in 2024, retail sales were down by 0.7% in October and this is the impact of the economy on the masses.
• Social Factors:Consideration of sustainability and ethical perception in production is today considered important in the attraction of customers. Currently, younger consumers, especially the Gen Z customers, expect to have information about sourcing and production (Mintel, 2022).
• Technological Factors:E-commerce and digitalization are the major trends that have impacted the part of retail industry. To counteract online platforms, multiple high street stores have started using omnichannels, with an integration of the internet and digital technology to increase customer experience (Savills, 2024).
• Environmental Factors:Measures like waste and carbon emissions are slowly turning into compulsory prerequisites that one has to undertake so as to survive in the market. These expectations if not met by the retailers will lead to the retailers losing their market share.
• Legal Factors:Banding business codes of practice and even extended and tightened regulatory compliance laws especially for the high street clothing retailers have pushed up the operating costs.

Impact of Current Economic Situation

Economic factors have in particular exacerbated problems for high street clothing stores in London. These have led to inflation with people really experiencing cost of living crises meaning that their disposable income has gone down and they’re only willing to spend on necessities. However, in Q1 2024, people spent 0.8% less on clothing making pressure on the retail sector continue (Savills, 2024).

In recent years, store closure is being common as brands such as Monki owned by H&M has decided to pull out of the entire UK market because of dwindiling profitability (The Sun, 2024). The number of people in employment situation in the retail industry has also been impacted due to less number of recruitments and dismissals due to constraints that retailers are undertaking (ONS, 2021).

Recommendations 

For this reason, high street clothing retailers need to learn how to compete in the new environment based primarily in London. The following strategies are recommended:

Figure 3: Recommendations

• Adopt Omnichannel Strategies: Multichannel retailing should be the focus of modern supermarkets that will combine online and offline presence and use customers’ information for service customization.
• Focus on Sustainability:The adoption of environmentally sustainability management practices and reporting on the supply chain networks can lure the green consumers and meet institutional requirements.
• Enhance Customer Experience: Therefore, digital tools, in-store facilities, and advanced and creative promotions should be integrated to develop and provide interesting shopping experiences.

Conclusion

Therefore, it has emerged that the London high street clothing market is under pressure from macroeconomic shocks and changing consumer attitudes. But if the high street retailers have implemented sustainability, digital transformation and customer focused strategies of retailing business, then they can sustain in the ever changing environment of retail scenario.

References

Mintel. (2022) UK Clothing Retailing Market Report 2022. Available at: https://store.mintel.com/report/uk-clothing-retailing-market-report-2022.

Office for National Statistics (ONS). (2021) Economic trends in the retail sector, Great Britain: 1989 to 2021. Available at: https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/articles/economictrendsintheretailsectorgreatbritain/1989to2021.

Reuters. (2024) UK retail sales fall by 0.7% in October 2024. Available at: https://www.reuters.com/world/uk/uk-retail-sales-fall-by-07-october-2024-11-22/.

Savills. (2024) UK retail sales trends - Quarterly report Q1 2024. Available at: https://www.savills.co.uk/research_articles/229130/359149-0.

Statista. (2022) Apparel market in the UK - statistics & facts. Available at: https://www.statista.com/topics/3348/apparel-market-in-the-uk/.

The Sun. (2024) Monki, owned by H&M, to close all UK stores. Available at: https://www.thesun.co.uk/money/32097770/chain-owned-by-hm-to-close-all-stores/.

Task 2: Artificial Intelligence and the UK Labour Market: A Focus on the Healthcare Sector

Introduction

Figure 4: Application of Ai within Workforce

Artificial Intelligence is rapidly evolving across the global hence having serious implications of demand for workforce across the United Kingdom. As the work of mimicking human intelligence by computers and cognitive systems, AI is changing the delivery and quality of healthcare by increasing the precision of diagnosis, process efficiency, and treatment. This briefing paper provides a critical evaluation of the effects of AI on the UK healthcare labour market together with opportunities and threats to the businesses; with reference to Babylon Health and Sensyne Health.

Overview of the Healthcare Sector

The healthcare industry of the United Kingdom has incorporated the use of artificial intelligence due to increasing need for effective and efficient care. Artificial intelligence concepts including big data analytics, robotics and chat bots have now become important components of healthcare advancement. Currently, there are two major UK based organizations that form part of this new breed of players; Babylon Health and Sensyne Health. Babylon Health uses artificial intelligence to deliver digital health solutions which are in the shape of diagnostic aids and telemedicine services (100x Venture Hub, 2023). Sensyne Health is focused on clinical AI that utilises the patient data in enhancing medical research and treatment’s outcomes (Wired, 2022).

Benefits for Businesses 

Figure 5: Illustration presenting benefit of Ai impact on Healthcare Industry

AI technologies, therefore, have shown the ability to provide significant value addition to healthcare organizations. First, they bring efficiency and effectiveness to the realization of repetitive work, so that health care professionals can devote their efforts to urgent and essential medical operations. For example, Babylon Health is an application where the use of artificial intelligence chatbots simplifies the initial diagnosis allowing the general practitioner to focus on individual cases [reduces workload of GP and provides patients’ access to the services 100* times], 2023. Likewise, through the power of AI, Sensyne Health is capable of sorting through huge amounts of data for patients, helping with clinical trials, and progress research (Wired, 2022).

Disadvantages for Businesses 

However, like every technology, AI has several implications for the healthcare industry, which I will next discuss. One of the big issues is job disparity. It has to be noted, that AI technologies can minimize the clerical work by automating many of the works that would otherwise be carried out by people, for instance, appointment scheduling and patient record management (UK Government, 2021). For example, Babylon Health’s currently provides many of these functions through digital interfaces, leading to concerns about workforce obsolescence or at least considerable diminishment (Barr Media, 2024). The first of such challenges is the skills gap. With the continued increase of AI adoption, there is a need for new competencies of healthcare workers specifically in data analysis and AI tools. AI training can be a challenge for many organisations and so are permanent upskilling programs, which can impede the achievement of objectives tied to AI and restrain its advantages (Health Foundation, 2022). Also, several ethical challenges like data privacy and security continue to be a challenge. AI systems need massive amounts of patient data, and therefore, data protection laws must be followed (Barr Media, 2024).

Key Trends and Changes

Based on the evidence from the present study, it can be concluded that AI has brought profound changes in the UK health care workforce configuration. Whereas, conventional positions like medical secretaries are falling out of fashion; people are in dire need for data scientist and artificial intelligence professionals. According to the UK Government, through to 2031, incorporating AI into UK healthcare systems will create the biggest net new jobs out of any sector due to increased demand stemming from population aging and improved health services. Furthermore, AI is promoting the emergence of such a new type of positions that would require both clinical background and digital competencies at the same time. For example, radiologists and pathologists use artificial intelligent to analyse images resulting in better and quicker diagnoses (Health Foundation, 2022).

Recommendations 

Key recommendations include:

• Invest in Workforce Upskilling: To ensure that employees accept the use of AI in the organization, organizations must embark on training programs so that employees can learn suitable ways to work with AI.
• Develop Ethical AI Frameworks: To support the corporate stakeholders, organizations need to incorporate appropriate measures that maintain the level of data protection regulations and consider ethical issues with the help of adequate precautions.
• Encourage Government Collaboration: More effort should be devoted to promoting an environment of innovation in the policy and business realm to ensure that AI technologies are productive for companies and useful to the larger population of workers.

Conclusion

Finally, it was found that AI is creating a positive shift in the state of the UK’s healthcare system due to such advantages as time optimization, expense reduction, optimization of patient treatment. Organizations such as Babylon Health and Sensyne Health are some of the organizations that demonstrate how AI can solve key issues with the delivery of care.

References

100x Venture Hub. (2023) Revolutionizing healthcare with AI: How Babylon Health scaled digital healthcare. Available at: https://100xventurehub.com/case-study-revolutionizing-healthcare-with-ai-how-babylon-health-scaled-digital-healthcare.

Barr Media. (2024) Unraveling Babylon Health’s challenges in the AI healthcare industry. Available at: https://barr.media/insight/unraveling-babylon-healths-challenges-in-the-ai-health-care-industry.

Financial Times. (2024) AI healthcare technologies and regulatory challenges. Available at: https://www.ft.com/content/b4dd8b0a-5328-454b-8657-769b02852dee.

Health Foundation. (2022) What do technology and AI mean for the future of work in health care? Available at: https://www.health.org.uk/publications/long-reads/what-do-technology-and-ai-mean-for-the-future-of-work-in-health-care.

UK Government. (2021) The impact of AI on jobs in the UK. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1023590/impact-of-ai-on-jobs.pdf.

Wired. (2022) Babylon Health's warning for AI unicorns. Available at: https://www.wired.com/story/babylon-health-warning-ai-unicorns

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