M&S eyes loyalty insights from Sparks to kickstart ‘unsatisfactory’ clothing sales
Marks and Spencer (M&S) is banking on the insights from its loyalty card to help kickstart its wilting clothing business that has underperformed for 18 quarters out of 19.
“Disappointing” and “unsatisfactory” was how the retailer’s chief executive Steve Rowe described a 2.7 per cent fall in like-for-like sales for the 13 weeks to 26 March. Ailing clothing and general merchandise sales are becoming something of a permanent blotch on the balance sheet of M&S, which despite various restructures and marketing attempts, has struggled to build momentum behind that side of the business, which has left Rowe with a sizeable task.
He took on the top job this week and admitted the results show the business has “a lot to do” , including reviewing the data it has collected from its recently introduced loyalty scheme Sparks to get a better insight in to its core consumer.
“We have a lot more to do on clothing and home and improvements are coming through in terms of availability and we have started to do less promotion. However, we are most definitely not there and this performance is not good enough and we are working hard to improve it as a team.”
The number of customers signed up to Sparks has leapt to 4 million, up from 3.5 million in the autumn, and Rowe said come October M&S will take an in depth look at the data it has collected from shoppers and use it to help marketing efforts.
“We will be using that tool to reach our consumer as well as in marketing and [use it to] allow deeper insights to how customers are thinking and shopping.
"What we had before was lots of data but not linked together, but this draws data from consumers and its importantly information that they’ve given us about where they shop, how they shop... and it comes from one pot that is easily identifiable."
Part of the turnaround plan has also seen M&S reduce the price of its clothing ranges to line up with competitors, with cuts down by around 10 to 15 per cent on some 300 lines, while the price of its core promoted womenswear is down from an average £40 to £35 this spring.
Despite the unsatisfactory performance in clothing, some of M&S’s countermeasures are beginning to bear fruit, particularly online where returns were down 7 to 10 per cent in the quarter, which Rowe credited to a better focus on finish and fit following the recent appointment of womenswear director Jo Jenkins.
“In terms of [online] we are really pleased with the performance… work is going on to build the customer base and we are using Sparks for that, which has been successful. We have increased in speed by 9 per cent and we have a good plan to drive the business forward. One of the things we did was cut back on the number of online only promotions to get a clear value proposition and that had an impact on sales in this quarter,” added Rowe.
The results of a review of its clothing and general merchandising business will be announced in May when M&S will report its full year results.
Outside of clothing, the retailer continued to see success in its food business where sales were up by 4 per cent in the quarter. M&S opened 80 new stores in 2015 and as a result grew market share to 4.3 per cent. The company said it will continue to invest in its special and different products and will also launch 400 new lines.
Ahead of May’s full year results, Rowe added that the business has “given ourselves a number of exam questions, we want to do that in a robust way and we are not leaving a stone unturned”.