The idea of working on this retail brand struck me when I was reading The Economist online recently. Not a place where you’d expect to see an advert for M&S, but there it was. A typical catalogue-style advert of women’s apparel, staring at me on my computer screen. I couldn’t help but think what is M&S doing advertising here? Then, the advert itself was no more than a section of their website.
The first is clearly a problem with all digital advertising. It is supposed to be contextual, but it isn’t in the way that traditional media is. More about that in a future post that I intend writing on what the digital medium needs to do in order to enable brand-building and not merely act as a sales funnel.
The second problem of the kind of advert it was, is what I intend to tackle here.
My shopping experience at Marks and Spencer goes back many decades, to the time I first shopped there on visits to London. Later, I have shopped at M&S in Singapore, Delhi and online at Amazon and I have found the brand to stand for excellent value for money. I still wear some of the clothes I bought decades ago in London! It’s not just that they have lasted so long, it’s also that their styles are timeless. Their apparel brand then was St Michael. What a long way, the brand has travelled since then. Or has it?
M&S is a British retail institution established in 1884, with a flagship store on Oxford Street in London and thousands of stores in the UK and across the world. Its main merchandise is apparel for the family and personal care products also sold under its own brand. It was never the store for food products, even though it might have had a small food and wine section in the UK. There are enough supermarkets and grocery retailers to cater to the UK demand.
I don’t know if it is the effect of the Covid pandemic, but I was rather taken aback by the brand’s diversification to F&B as well as home and, believe it or not, to financial services including a bank, credit card and insurance business. It’s all there on the M&S website! What’s more, they appear to have discontinued their personal care products and are now only retailing other beauty brands.
I then thought I must check out what advertising communication they have been creating, besides the usual Christmas advert, and that led yours truly to YouTube. I was even more aghast at the extent of the brand’s pivot to foods on the channel! I thought I had reached a cookery show channel!
Even if it is only a reaction to the pandemic, when apparel and beauty sales might be down and the company felt the need to diversify, this was perhaps not the best way to go about it. First, foods would mostly cater to local demand in the UK. The international M&S shopper is still going to visit the store only for apparel and personal care products. Not such a good idea to focus so much on food on the website as well as on YouTube. Home might have been a good idea during the pandemic as many who began working from home would have engaged in home improvements.
However, from the M&S corporate earnings on their website, it appears that foods led the growth at M&S, especially because of their tie-up with Ocado, an online grocery retailer in the UK. The website says that clothing and home sections were both down. For the full year, operating profit stood at £ 50.3 million and the full year loss at £ 201.2 million. Food revenue was up 1.3%, while clothing and home were down 31.5%. M&S’s international division’s operating profit was £ 45.1 million, down -59.3%, though they say online sales made up for some of the losses. From the ratio of operating profit of international to the overall group level, it appears that international only makes up around a third of M&S, with most of the business coming from the home market.
M&S revenue worldwide has been growing modestly, with 2018 having been their best year in the past decade. But their clothing and home revenue is believed to have been shrinking for the past nine financial years, according to Statista and that might have pressured them to foray into foods. At any rate it appears to be a recent diversification and there is room yet for course correction.
I say course correction because I don’t see why M&S should choose to be in an overcrowded market trying to compete with grocery supermarket giants such as Tesco and Sainsbury’s along with many other players. As it is, M&S seems to have a market share of only around 3% in grocery since 2017.
To my mind, the M&S brand stands for excellent value and classic timeless styles in fashion and personal care. That should be the core of the brand, and I would urge the company to revert to its roots and rebuild the brand, in keeping with the times. To that extent, I have worked on a brand strategy and ideas for M&S fashion and personal care, that endeavours to make the brand stand for unfast fashion and relaxed indulgence – both have a focus on earth conscious materials and values, from using natural ingredients to recycling. It helps M&S compete better with fast fashion brands and with personal care products from multinational giants. You can read all about them by visiting the page whose link is below.
Ways of reviving Marks and Spencer
As far as foods is concerned, it is better if M&S conduct market research with regular M&S customers across UK first and see if there is an unfilled need for gourmet foods that are ready to cook and serve. If there is a viable market, M&S should try and build a unique M&S gourmet foods brand, ranging from starters to main courses, picnic hampers, barbeque, desserts and confectionery as well as deli and bakery products. This would at least differentiate M&S from the larger grocery supermarket chains and could form part of the same unfast, relaxed, good for the planet lifestyle.
The research should also be with a large representative sample of regular M&S customers in the UK, not with just 200 odd people, as the Harris Interactive research chart from Statista seems to suggest.
I would urge M&S to pursue a stronger long-term strategy that will help the brand stand out from its competitors, and not one that is just suited to the pandemic times. For one thing, the foods business is a highly commoditized business and unless one can really build a unique product and service difference, it is not worth it. Especially not when you have to compete with established players in a crowded market. For another, the UK is already reopening its economy and people are slowly getting back to going out, dining out and socializing, besides getting back to the office.
Plenty of residual brand value still left in M&S apparel and personal care, I would think to stage a really well-thought comeback.
You can read my blog post with thoughts and ideas for another great British retail brand, Liberty London, here.
2 thoughts on “Ways a British Retail Institution Can Remake Itself”
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