In a mobile-first consumer world under constant bombardment from Amazon, it was refreshing to hear a candid assessment of the current retail market by Marks and Spencer’s Chief Exec, Steve Rowe who explained the recent decision to close 100 of its 330-plus store estate.
Speaking at the recent Retail Week Live show in London, Rowe explained that while a number of stores will close in the next two to three years, he noted that only seven weren’t making a profit and nodded to the likes of internet pureplays like Missguided opening a flagship in White City.
Click and collect
While a third of its business will be made up of ecommerce sales within five years, click and collect is clearly vital to the current iteration of the M&S brand as 72% of merchandise bought online is picked up in store.
As with most retailers, data, or more importantly the right interpretation of data, is driving the business forward. Industry experts, Dunnhumby, have recently been taken on to make sense of the information the Sparks loyalty card provides and map the journeys that customers take across all touchpoints.
For eight years, the retailer had been losing customers but has recently turned that around. Indeed, of the UK population, 32m shop at M&S so the opportunity is enormous and Rowe wants to capitalise on that by working smarter and failing fast.
Fashion for all
Rowe outlined a methodical approach to its target audiences and the importance of customer lifetime value to the brand. This starts with schoolwear, a sector it has a 23% market share in, and moves onto products likes bras where it is the market leader.
However, like many brands and retailers, its core customer can leave and then return over time something which is underlined by suit purchases. While a sixth former or college leaver might look for an M&S suit for a job interview, their average consumer age for the product is 32.
So, M&S is investing heavily in developing fashion which fits well, is contemporary, provides a nod to the cat walk and is stylish. In this way it hopes to continue to democratise luxury for the masses.
Only time or indeed footfall will tell as to whether Mr Rowe has succeeded.