Marks and Spencer – a lesson for us all?
M&S – An analysis
Recently, M&S released the news that they are planning to close 60 stores, at home and abroad, but will also plan to open 200 additional Simply Food stores.
When we’ve done presentations at conferences we’ve always mentioned M&S as an “At Risk” retailer. When you look at failed big brands such as Woolworth, Comet and others, you can see because they’ve lost touch with their customer base and how this has caused a massive disconnect with their target audience We believe that M&S is in danger of ending up as just a quality food retailer…….but is this how it should be?
Customers are the reason we always mention M&S as at risk, because we believe that this lack of focus on customers is at the centre of their difficulties. In May 2016 Steve Rowe, CEO admitted they needed to put the customer back at the heart of their business.
Obviously, this is an issue that goes beyond service. We think it boils down to two core problems; firstly, a confused clothing offering that, in an attempt to be everything for everyone has become nothing to no-one. Secondly, as their consumer base aged, they forgot to engage the younger consumer.
So where did it start to go wrong for M&S?
In the late 80’s, and into the 90’s, new brands such as Next came into the market, they stole the younger market share, a group that viewed M&S as “where my parents shop”. Affordable work outfits and stylish casual clothing gained popularity with younger shoppers, and made it difficult for M&S to re-engage with them when they had their big turnaround in the late 90’s.
Engaging customers relevantly
Next, as an example, also created the definitive “Table Top” publication…..The Next Directory, a multi paged, case bound publication that any inspiring twenty something would gravitate to. Looking to flick through of an evening, to decide what their next big outfit would be. This was way before the internet, and we all had to actually speak to someone, or send off mail order, and wait for the delivery to be made.
This concept gave customers the opportunity to browse at their leisure and even if they didn’t purchase through that channel, it contributed to the loyalty they felt towards that retailer and influenced future purchases. Next had a clear brand identity and way of working that was relevant to the new generation of spenders.
Next has continued to innovate, their home delivery service has long used individual couriers for maximum flexibility and they now offer next day delivery on orders placed up to 12 midnight. M&S do offer next day delivery to store for orders placed by 8pm, but are more restricted when it comes to home deliveries, so have a weaker, less relevant offering for the consumer experience.
Lack of clarity
We believe, like many retailers, one of the things they were late to was a clear data strategy, one that defines how to engage newer, younger consumers, acquire them and then how to retain them. When you combine this with the issue of a muddled clothing offering with no clear “lighthouse” brand or value, it’s no surprise that they’ve experienced a drop in footfall.
This is especially interesting when you consider their food offering, which has a very clear brand and value proposition, and the genius decision in the mid 2000’s to open up in service stations.
In light of all this, what might they do?
1. Set up a Data strategy.
They’ve recently launched the Sparks loyalty card, which is a good move in terms of understanding who is shopping in their stores and what they’re buying. That data should then be used to segment their customer base and to drive highly personalised marketing content.
Having a clear and defined data strategy that links up the complete customer journey is absolutely essential if this brand is going to remain relevant.
What you know
We would imagine M&S have a lot of data, from their charge card offering, financial products, online purchases and now their Sparks card. Combing this data is crucial for working out the customer view they have currently. Mapping this out properly can reveal huge amounts about predictable consumer behaviour, purchase patterns and opportunities for growth.
What you don’t know
Creating the utopian model of data to provide the true 360 degree customer view, across all touch points and interactions, is essential to maintaining a strong and relevant communication strategy. Whether it’s knowing their preferred style of underwear, or how many packs of sprouts they purchase each week, can be weaved into a comprehensive matrix of fields to be used for insight and planning.
What you want to know
This data should then be mapped to marketing activities to work out how they are going to collect that utopian data set over time. Which channels offer the best opportunities to collect the data, what opportunities exist in terms of profiling and data sources in order to get that missing data.
The Royal Mail recently has conducted “Lifestages” research, a segmentation of people’s status at various stages of their life, in addition to exact age and income demographics. Link this information to known data, with relevant outbound communications via strategically chosen channels, and watch how more powerful the messages become for such a brand
What you’re going to do with what you know
Once you’ve got the insight, look at how you can leverage for in store strategies, product line preferences and marketing communications tailoring, to name a few. The opportunities here are huge, and M&S is the perfectly sized retailer to tackle such a project.
2. Refine the Brand offering
Do they stand for quality or cheaper goods? Affordable clothing or inspirational luxury? High fashion, old favourites or stylish, classical clothing?
The problem is, they appear to stand for all of that. Business has changed, consumers have changed, and a broad brush offering is harder to maintain than ever before. Why? It has some influence in the speed of change, managing constantly changing consumer trends and behaviour across many consumer segments is challenging.
Consumers also have a lot more choice, and the easier a brand is to understand; the easier it is for the consumer to identify with that brand.
For example, if someone says to you that they shop at Monsoon, chances are that you’ll instantly understand something about that individual. Whereas if that person responds “M&S” you’d have to put a bit more effort into understanding what that meant. A “Blue Harbour” M&S customer would have very different values from a “Collezione” customer, and a “Per Una” customer different from a “Classics” customer. Part of the reason it’s difficult is that these very different collections all have contrasting “values” – fashion versus classic, and M&S probably should decide on it’s core values and make sure any brand marques are consistent with those values.
It’s very challenging to maintain all that under a single brand marque. Department stores rely on 3rd party brand development to support a multi-consumer profile in store, meaning they only have to focus on the core offering.
This is no small project to tackle, but ideally they should listen to customers, examine the profitability of sub brands, and create a strong, consistent band identity and strategy across men’s, women’s and children’s clothing ranges.
So what are the lessons to be learnt?
The latest M&S Christmas commercial is a good one, and we’ve seen a response on social media that rivals the traditional John Lewis domination of the retail Christmas advert. It was a little late, but a strong contender, which could be a good indication of the beginning of a turnaround. Communicating a story as opposed to a montage of fashion and food (their usual approach) was, we think, why it’s worked so much better this year.
M&S have an aging and decreasing customer base, their challenge right now is to define their target audience, offer product that meets the demands of this segment and then engage, acquire and retain these people in a way that the consumer feels that M&S truly knows them as individuals. This would have the effect of making the brand much more relevant to their needs.
It is the hope in all of us here at Varia, that unlike so many of the other great British institutions that have sadly left us over the last decade, M&S can turn their brand around, the high street would look a very different place without them.
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