M&S MARKET LEADER

M&S  “affordable essentials for the whole family”

Based on an M&S strategic annual report(2018) I have extracted the following information:

“M&S retains market-leading positions in core categories such as lingerie, denim, business shirts, suits and Back to School.”

Strategy

CLOTHING & HOME 

Contemporary styles and wardrobe essentials at affordable prices for busy family and “encore” customers.

These already appeal to a broader, often younger customer base. Our intention is to build on these positions. The strength of our brand should be providing great value choices for stylish wardrobe essentials, the simple wearable classics that everyone needs to have. Our strength is to provide great value for people at a stage in life where they are prepared to pay a bit more for style and quality and move beyond the ‘throwaway’ culture. To do this, we will embark on a restructure of our ranges to buy deeper with fewer slowmoving lines, including a further reduction of over 10% in the year ahead. We will use our global sourcing strength to restore more strongly our value credentials and we will review the role of our sub-brands, such as per una, some of which have lost their identity in recent years. As our supply chain reforms start to impact, our ambition is to substantially reduce working capital and stock levels, reducing store labour costs and accelerating speed to market. In time, we expect to be able to replenish in season our fastest moving lines, improving availability and reducing markdown. We have set a target of achieving one-third of our sales online, which means growing double digits each year. Once we have fixed the basic issues in fulfilment and website performance, there is enormous scope for developing the M&S brand and product experience online in the UK and potentially abroad.

Marketing tone of voice has shifted with the new ‘Love it for Less’ campaign. For instance, highlighting our pure cotton tapered chinos priced at £19.50, available in a choice of ten colours. Good progress is being made in the closure of ageing stores and a comprehensive programme has been put in hand to improve the basic performance of our online website, search and checkout capability. On supply chain, an ‘end to end’ programme taskforce is now in step towards a ‘single-tier’ distribution network so that we no longer carry warehouse space whose main role is just to store stock. We are also closing centres at Hardwick and Neasden. At our Castle Donington online fulfilment centre we are investing to ‘debottleneck’ the facility to increase peak capacity.

 FACING STORE FACTS

M&S operates an ageing store estate reflecting the fact that it has been reluctant to close marginally contributing stores over many years. As a result , we carry a long tail of stores, some over 75 years old, which drag down the like-for-like sales performance and are brand damaging in their configuration. Even though some of these stores trade profitably, they will not warrant new investment, not least because the high street and shopping centres are changing fast. In particular, our smaller high street stores lack range authority and some of our larger stores carry too much space. As the market shifts and moves online these problems will become worse unless we move fast.

WHAT’S HAPPENING

 We are accelerating our store closure programme which will result in the closure of around a quarter of our 2016 Clothing & Home space. 32 stores have already been closed or been proposed for closure, out of a reduction of over 100. Some of the larger remaining stores are being downsized so we will converge on a more cohesive portfolio. The closure programme is producing good results with significant sales transfer to nearby, more profitable sites. There will be a limited number of new openings of mid-size stores in high potential sites. In Food, we cut back on the opening programme, focusing now only on the largest trading opportunities in sites capable of good volume growth.

WHAT’S NEXT

Once the reshaping of our core store portfolio is well underway, we will need to relook at our formats to adapt them to a rapidly changing shopping environment. Already, we can see relatively low cost opportunities to modernise our stores to drive sales and improve customer experience. For instance, through our Shop Your Way service, 64% of our online sales are picked up in-store yet many of our collection points are inconveniently situated. Our payment and checkout facilities need more modernising and rationalising and a number of services will be brought together. And many of our larger stores have blocked sight lines and are hard for time-pressed customers to navigate. In the year ahead we will explore ‘capital lite’ options to refresh our existing estate and develop formats for the future.

M&S.COM FACING FACTS

Our digital capability is behind the best in the market and the state of the art is moving rapidly. Although we have the second largest online Clothing & Home market share in the UK, we are losing share and are behind the best of our competitors. Our download speeds are slower than the best, our search facility is average and our mobile application needs improvement. Castle Donington was built at great expense but is never likely to achieve planned capacity, lacks resilience and cannot currently meet peak demand.

WHAT’S HAPPENING

We have an urgent programme in hand to fix our base platform capability which should see improvements this year in speed and responsiveness. Already, the majority of our orders are collected in-store and we are investing to make this process faster and more convenient, an advantage over our online only competition. Steps are being taken to ‘debottleneck’ Castle Donington so that it can meet expected peak demand this year and next. And we are extending the cut off time (10.00 pm) for next-day deliveries. Given the need to broaden our appeal to family-age customers, we are extending our presence and reach in social media. In March, we were one of the first to launch on Instagram Shoppable.

WHAT’S NEXT

 Given the 8% growth online in the fourth quarter, we believe that if we implement these basic changes and the improvements we plan in range and product, we will see acceleration of growth towards our one-third target. Combined with store closures this will deliver a more profitable and sustainable business. Our ambition is also to become a truly digital business, not only competitive online but adept at using artificial intelligence to better interact with customers and develop a more personalised relationship. Given M&S’s skills in style and fit and our expertise in fabric we hope to develop innovative ways of helping customers to gain inspiration online and find the right product for their look. Try Tuesday, our online inspiration service, already has 160,000 customers signed up, of which 62% say they have bought something as a result

Platforms:

Instagram 1 M followers
Twitter 572 K followers

Facebook 5.2 M likes

M&S uses a classic and simple brand aesthetic in contrast to Victoria's Secret. Their brand heritage creates a strong link with their customers who trust the company and their values. In terms of lingerie they offer a wide range of styles and sizes (bras from 28 A to 46 K) at affordable prices.

The in-store brand aesthetic matches both the website and other online communication channels like Instagram.



Their main selling point is that they are a one-stop destination for everything that you need, from food to underwear, with a great price-quality ratio. 

With people nowadays looking for comfort when buying lingerie and having to deal with constantly busy schedules and hectic days at work , it's no wonder that customers are choosing to buy essential things like lingerie quickly and only look for more sophisticated styles occasionally when they go for a shopping session or feel the need to spoil themselves with a nice purchase.