M&S’s never-ending rebuild

 
Person carrying M&S bag Online sales at M&S have fallen by more than 8%

Marks and Spencer has announced that online sales have fallen by more than 8% after its new website launch suffered from a period of what the retailer described as "bedding in".

In an age of phenomenal digital retail growth, the drop certainly bucks the market. Sadly, it's in the wrong way.

Like a home owner with the builders in, chief executive Marc Bolland insists the house will be lovely once the work is finished. Lots of new content, videos and ways of shopping online will bring customers flooding back, he says.

M&S did warn the market earlier in the year that the launch of the new website would mean an initial drop in customers registering to use it.

Alan Stewart, chief financial officer of M&S, describes the retailer's new website as "like going to the supermarket for milk".

"You know it is there but you have to walk the aisles to find it," he said.

The problem is that in an age when loyalty to the traditional retailers has fallen markedly, the fact that lots of other people are also selling milk sucks customers away. Once lost, it can be hard to persuade them back.

'Stumbling around'

Looking at the, totally unscientific of course, Twitter reaction to the news on Tuesday morning, some people are indeed finding it difficult.

Joseph McGrath ‏@JosephMcGrath4

@bbckamal Have you tried to buy online from M&S? Not so easy.

Is just one example.

Stumbling around the new site has, one assumes, turned people off. And, as one head of a digital retailing organisation once told me, if you need more than three clicks to find anything, you are likely to lose the customer.

Particularly when - as M&S is doing - the focus is on protecting profit margins rather than indulging in constant sales promotions. Online is incredibly susceptible to special offers. And total simplicity.

M&S is only just over half way to registering the six million people it wants on its online site. Expect another quarter at least of tricky digital numbers.

Mr Bolland will have to ensure that all is running smoothly by the time of peak sales, the end of November and the run into Christmas. Positive festive numbers will now be more vital than ever.

Mr Bolland is ever the optimist - saying this morning that he is enjoying the job and this is "a journey". It's just a pretty long one.

Bright points include like-for-like food sales which are up 1.7% and international sales up nearly 5%, largely down to new store openings. Overall group sales are up over 2%.

But clothing sales - a constant concern for investors - are down 0.6%. That division will need to see the improvement in womenswear (where like-for-like sales are slightly up) extended to the rest of the range.

Mr Bolland is heading to Wembley Stadium this morning to face investors at the company's annual general meeting.

He will face some tricky questions.

 
Kamal Ahmed Article written by Kamal Ahmed Kamal Ahmed Business editor

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  • rate this
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    Comment number 191.

    Re. M&S website, nice to know it's not just me! Tried to order some flowers , couldn't get the site to work for ages, then had to re-register!
    Turns out the new website won't work with Windows XP ( I know - time I got a new PC, etc) but I suspect that many M&S customers have older PC's like me. Perhaps the website is just a bit too clever - Tesco, Ebay, Amazon, work fine on XP.

  • rate this
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    Comment number 190.

    All the clothes racks at Chelmsford show one reason why MS is in trouble. Plenty of the large sizes. few/none for the average sizes, and small sizes missing any time of day. Large sizes dominate the offer racks. Customer Care (there's a joke) says stock levels depend on demand. But of course, they don't know how many just walk or stay away. And all this before style, quality et al.

  • rate this
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    Comment number 189.

    As I have mentioned before, having things I stock, either in store or on line would help. Regularly my wife finds things she may buy, but size 6 petites either don't exist or are sold out. We discussed this with the manager of Fosse Park, and he said he had been telling HQ for years. They had a skirt from the Christmas adverts, and sold out of petite in 2 days, no more stock available. Ridiculous

  • rate this
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    Comment number 188.

    Food is quality though somewhat expensive on the whole. Currency exchange folk are normally efficient.

    Male clothes are poorly designed, made and marketed. Does anyone buy this dross?

    Female clothes line tend to have a decent burst every few years before resorting to type.

  • rate this
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    Comment number 187.

    I remember when M+S clothing was made in UK and good.

    Now it's made abroad, and it isn't.

    That doesn't mean all UK product is good, but M+S' clothing was, and it was a key selling point.

    So basically, very clever managers threw away the USP. Now the same clever managers are scratching their heads to find a solution.

    It really does show that 'management' is often over-rated and overpaid.

 

Comments 5 of 191

 

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