Can M&S regain its magic?
A few weeks ago, all eyes were on Marks and Spencer, UK’s biggest clothing retailer. The company released their annual results and sales in their core clothing and home wares division was down 2.9% compared to the previous year. The company’s new CEO, Steve Rowe, laid out his plans to kick start the business and the brand. The big question on everyone’s mind — will it work this time?
Their skepticism is not misplaced. Steve is Marks & Spencer’s 5th boss since 2001 and the company’s efforts to revitalize itself have had little success as evidenced by their share price over this period.
So what can M&S do to kick-start its clothing business into growth mode?
1. Not just “Mrs.M&S”
Central to the revival plans is reconnecting with core customers who M&S have labelled “Mrs M&S” — a woman in her 50s who shops with them around 18 times a year. Is this enough? No. For answers, we only need to look at the performance of Primark for the past 10 years. The graph shows the meteoric rise of Primark in clothes retailing compared to Marks&Spencer and Next.
And their secret? Primark’s target segment (as stated in their annual reports) is the fashion-conscious customer under 35 years of age. M&S cannot afford to side-step this segment because this is where the growth in clothing sales has come from.
2. Redefine “value”.
As the originators of the Penny Bazaar (where every item cost a penny), Marks & Spencer have epitomized value on the UK high street for decades. For M&S, value means quality at reasonable price — a dress or a t-shirt that can withstand regular use for years and years, all for a small premium over the price of competing brands.
Today’s fashion-conscious customers are however looking for several items of clothing which they use occasionally, rather than a few items that they use regularly — a need that Primark has brilliantly tapped into by offering fashionable clothes with quality good enough to last a few uses rather than a lifetime. The challenge for M&S is redefine its value proposition to win over the fashion conscious customer, without alienating its core customers who are still aligned to original value proposition. And the key to doing this lies in M&S’s brand portfolio.
3. Rationalize brands.
M&S’s brand portfolio for clothing is bewildering to say the least. Here are some of the brands across the men’s and women’s clothing.
It is hard to see what each of these brands / sub-brands offer and how they are different from the other brands/sub-brands in the portfolio. The proliferation of brands has only served to diminish the M&S value proposition rather than enhance it.
What M&S needs a simple and clear brand portfolio. Something similar to this would be a good starting point.
- St Michael — “Everyday clothing for the family — great quality at reasonable prices”
- Per Una — “Fashionable women’s clothing designed for occasional use” aimed at the Primark market
- Autograph — “ Premium formal wear for men and women”
- North Coast — “Fashionable men’s clothing designed for occasional use” aimed at the Primark market
The threat to M&S is very real. Iconic brands have vanished from the UK high street with alarming regularity. To survive, M&S needs to radically reinvent itself and be prepared to compete with the likes of Primark. Failure to do so will reduce M&S’s prominence of the high street in the coming years and even consign them to just being food halls — which will be a huge loss to the retail industry given how influential M&S has been.
So good luck Steve Rowe — I sincerely hope you succeed in turning around M&S.