Marks & Spencer has appointed former Tesco Clubcard boss Danielle Papagapiou to reboot its flagging Sparks loyalty scheme.

Papagapiou has joined the high street bellwether as part of a reshuffle of its data and digital teams, as it accelerates efforts to create a “digital-first business”.

In an internal memo sent to staff and seen by Retail Week, M&S chief data and digital officer Jeremy Pee says the new-look digital and data function will focus on six key areas: customer growth and experience, business development and innovation, loyalty, data, data science, and digital product management.

“The likes of Sainsbury’s and Waitrose will be worried about the calibre of that team”

Tony Gregg, Anthony Gregg Partnership

As part of that push, Papagapiou will focus specifically on the relaunch the retailer’s Sparks loyalty scheme next year, which boss Steve Rowe says “needs substantial improvement”. Critics say Sparks is confusing for shoppers and relies too heavily on discounting to drive usage in its current form, offering shoppers promotions based on the number of points they have accumulated. 

Papagapiou has previous when it comes to creating a compelling rewards scheme. The University of Warwick graduate began her career as a consultant at Capgemini before embarking on a 15-year stint at Tesco.

Papagapiou was part of the original team that developed the grocer’s Clubcard in 2011, before going on to act as Clubcard director for nearly two years in between 2015 and 2016.

Statement hire

Tony Gregg, founder of retail executive search firm Anthony Gregg Partnership, believes Papagapiou’s appointment is a compelling statement of intent from the department store chain.

“She is a real golden hire for M&S,” Gregg says. “Her appointment sends a clear signal to the marketing team acknowledging that M&S hasn’t got the data expertise internally and knows it hasn’t, so it has moved externally to bring in the best. I definitely think the likes of Sainsbury’s and Waitrose will be worried about the calibre of that team.”

Papagapiou’s most recent appointment as customer director at Vision Express has provided her with experience across high street retail as well as grocery, which should stand her in good stead to understand the broad church of categories and customers that M&S serves.

DynamicAction founder and chief data scientist Michael Ross says Papagapiou’s experience bodes well, but stresses the complexity of the task at hand is not to be underestimated.

“While Clubcard has been extraordinarily successful, it was a formula that served Tesco very well in moving from a world where it had no idea who was buying what, to effectively selling that data back to consumer goods companies.

“Marks & Spencer is a very different beast, so the challenge for [Papagapiou] will be identifying which bits of Clubcard’s development are hyper-relevant to Marks & Spencer and the ones which will not resonate.”

Better targeting

Ross suggests that identifying and nurturing the business’ most profitable shoppers will be crucial if Papagapiou is to get Sparks delivering the best results for its 7 million members.

“The key will be to understand which customers make M&S money, how they make money, which customers lose you money and re-orientate how you communicate with each group accordingly,” Ross says.

Will Dymott, founder and managing director of Hachiko, which creates personalised catalogues to send to online shoppers, concurs with that view, stressing that M&S needs to rediscover “who its customer actually is”. 

“Marks & Spencer has its own unique issues because it has food customers, fashion customers and then a whole spectrum of customers within those groups,” Dymott says. “But the fundamental issue is that M&S has tried to address this complexity by making its own offer and loyalty scheme even more complicated and has forgotten who its customer actually is as a result.

“To see real success in a role like [Papagapiou’s] requires a fundamental rewiring of how an organisation works”

Michael Ross, DynamicAction

“It is very easy to be seduced by shiny new customers, but Marks & Spencer have a big group of customers who have been around forever and what it doesn’t want to do is alienate them.”

In order to resonate with those existing shoppers, Dymott believes Sparks must pivot to offer a greater level of personalisation. He says the retailer needs to make better use of ‘next best action’ analysis to determine what a shopper has bought recently and therefore what they are likely to want to buy next, tailoring offers accordingly.

“If you have a customer who only buys food with you, for example, there is no point in trying to cross-sell them into new categories,” Dymott argues.

Ross believes that reshuffling the digital and data team is a step in the right direction for Marks & Spencer, but stresses that the level of work required to facilitate real change remains substantial.

“To see real success in a role like [Papagapiou’s] requires a fundamental rewiring of how an organisation works,” he cautions. “A challenge for customer relationship management and loyalty is that it has historically been seen in retail as a marketing activity, when really it is a whole company transformation.

“To make an impact you need your operations and merchandising teams engaging in the idea of customer profitability as well as your digital teams, and that requires a massive cultural shift.”

Papagapiou’s appointment comes shortly after Marks & Spencer’s relegation from the FTSE 100, offering a prescient lesson on what is at stake if a retailer does not keep up with its customers.

Her role – to drive the department store chain’s attempt to reconnect with its most engaged cohort of shoppers – could spark a revival for the business. But Marks & Spencer will need to radically rewire its business if it is to achieve its bold “digital-first” ambitions.