M&S’s new chief executive Steve Rowe today claimed retail is “a very simple business” as he unveiled plans to revitalise its ailing clothing arm.
He may live to regret those words, but the straight-talking former M&S Saturday boy appears to be adopting a back-to-basics approach in a bid to regain former glories for its clothing and homewares division. Full-year like-for-likes within the division slipped 2.9%, it revealed today.
Here we look at the areas Rowe is focusing on with his turnaround efforts.
Using data to understand its customers better
M&S is doing a lot of work around analysing data. Its strategy will be based on “fact and hard evidence, rather than the things we think”, Rowe told journalists and analysts gathered at M&S’s Paddington head office today.
The high-street stalwart has attracted criticism in the past for appearing not to know who its core customer is. However, today Rowe unveiled the concept of ‘Mrs M&S’ – its typical customer, a woman aged 50-plus, who visits the retailer 18 times a year.
Rowe vowed to “cherish and celebrate” Mrs M&S.
But of its 32 million customers, Rowe revealed some intriguing statistics, including the fact that 42% are men.
And 22% of all customers are under 35. M&S’s new boss sees this as an opportunity.
Arguably the most startling nugget was that 90% of its customers are “single mission” visitors, either buying something to wear or doing their food shopping. Rowe’s challenge, he said, is about “being more relevant, more often”.
Sorting out product and range
M&S research revealed a number of “frustrations” for their customers when it comes to clothing. These included “overwhelming” choice, too much effort needed to find certain products, lines being out of stock and “inconsistencies” on both price and value.
As a result, Rowe has revealed plans to slash the number of promotions it offers on clothing in a bid to focus on a core value offer, with “wardrobe essentials” among the priorities. It will also concentrate on “wearable, contemporary style”, rather than catwalk lines.
Rowe aims to simplify the M&S range and cut the number of SKUs by around 10%.
Speculation previously suggested M&S will cull some of its own clothing brands as they are confusing to shoppers. Rowe refused to confirm anything today, but admitted it will “re-evaluate” its collection of sub-brands.
One big problem, however, as Rowe noted, is that 60% of women are buying fewer clothes than they were 10 years ago.
Boosting the customer experience
Rowe admitted that M&S has “cut back a little too far in store staffing”.
His plan is to hire more customer-facing workers to drive up customer service levels in its shops. Investment in better changing rooms, toilets and cafes is also promised.
Staff will be rewarded with a pay hike next April, with staff in Greater London getting £9.65 and employees outside London receiving £8.50.
The retailer also plans to boost investment in its ecommerce platform, which now holds a 7% share of the online UK fashion market after etail sales jumped 23% last year.
That figure means it is now second in the market, but still some way behind rival Next.
Ditching the jargon
In a nod to how M&S is trying to connect better to its customer, it has scrapped the term “general merchandise”.
Instead, Rowe has begun referring to the division simply as “clothing and homeware”.
Steady as she goes on food
Food is still flying for M&S, with full-year sales up 3.6%. Like-for-likes edged up 0.2% and it now boasts a 4.3% share of the grocery market.
M&S flagged a “challenging and deflationary” trading environment but said its “quality and innovation” is setting it apart from mainstream supermarket rivals.
Rowe said it will also cut promotions on food and instead will re-invest in regular lower prices to remain “competitive”.
M&S is accelerating its food store expansion plan, but Rowe was defiant, saying it is “not a race for space” and that the retailer will remain “selective” in where it opens.
Rowe admitted there will be some “short-term pain” as his changes take effect, warning that profits would be hit.
The markets have already reacted badly, with the share price today falling around 7%.
Rowe only gave half the story, though, with plans for what M&S will do with its UK store estate, its international business and the results of a “cost review” all remaining under wraps until the autumn.
For now, Rowe has some breathing space. But he will surely need all of his 30-plus years experience as a retailer in order to steer the M&S ship into calmer waters in today’s unpredictable, fast-changing retail environment.