M&S has work to do if Sparks loyalty data is to sit at the heart of its revival
If ‘Mrs M&S’ is to kickstart the struggling retailer’s business as quickly as its executives hope, the brand will need to work harder to shape and articulate the value of its Sparks loyalty card with her as well as its biggest group of shoppers – the 'Occasionals'.
It may only be seven months old but Sparks, used by four million shoppers (out of a potential pool of 32 million), sits at the crux of chief executive Steve Rowe’s plan to overhaul the retailer’s ailing general merchandise business. "At our best we will be data driven and make decisions on fact and evidence. Things we know, not think," he proclaimed during a press briefing this week.
What it's learning about customers is largely coming from Sparks and as such Rowe will target the 'core' seven million shoppers it has dubbed 'Mrs M&S' – female, aged 50-plus, coming into stores frequently and spending a lot. These, it can be assumed, are the customers using Sparks.
So far, the data has been used not only to segment M&S’ customers but inform a new pricing plan, store layout and strategy on how to stock products all based on 'Mrs M&S' and her shopping habits. The strategy for M&S' rebound therefore highly reflects exactly what top tier and 'core' customers want to see.
And yet M&S needs to be mindful of relying too much on such a limited pool of Sparks users who also may not be reflective of the large customer base outside of 'Mrs M&S'.
Some 42 per cent of M&S customers are men and a further 22 per cent are under 35. And so shaping the brand to be inclusive of what this group want - as well as those die-hard customers who already love the brand - is vital if it's to address where deeper-rooted issues that are preventing nearly 22 million of its customers from shopping more than just infrequently really lie.
“The very nature of Sparks as a ‘members club’ could limit interest among those customers who shop less frequently. If I don’t shop there very often, am I really going to engage in a scheme that will take time to deliver genuine benefits?” argued Danielle Pinnington, managing director at consultancy firm Shoppercentric.
For M&S to successfully turn its fortunes around, not only does it have to “cherish Mrs M&S” as Rowe put it, but it must begin to convert the ‘occasional’ shoppers into ‘core’, and more ‘core’ into ‘top’.
That conversion will only come from really understanding the barriers to purchasing among these less frequent customers, which assumes they hold Sparks cards – so if they don’t have enough ‘occasionals’ using a card, Rowe won't have that insight in the data.
Rowe then finds himself in a catch-22 situation. Despite promising he isn't ignoring younger shoppers, it will be at his peril that those who are under 50 years old are not heavily factored into the retailer’s future.
Get the offering right
Loyalty cards have been scrutinised by many retail bosses in recent times, presenting M&S with ample opportunity to see what’s working and what’s not. Both Tesco and Nectar cut the value of their own cards, while Waitrose has distanced itself from the standard points-based system. It would seem then that Sparks’ focus on rewarding loyalty with experiences, service and exclusivity is in tune with the market and now it needs to get better at communicating that.
However, M&S has faced a bit of criticism for the scheme for being confusing in comparison to the likes of Nectar, Boots Advantage Card, and Tesco’s Clubcard. Sparks members get 10 points for every £1 spent as well as bonus points for using some services or leaving a review online. But then it will reset every year, even though the user will retain the same level of reward. And only when they reach a certain level of points (minimum 3,000) will they begin to see the rewards. So there is little incentive to sign up for the occasional customer.
"It isn’t 'behaviourally innovative’ in a way that some brands are doing so well. Harris + Hoole, for example, offers seamless rewards for loyal customers, removing potential pain points through an app," suggested Matt Bagwell, managing director at Naked Communications.
A rudimentary search on social media spotlights confusion around the card’s offer; one user said they had “no idea” what the card is about, while others highlighted technical issues they had with it in-store.
With the number of customers joining membership schemes falling by 15 per cent over the last two years (according to recent research from consumer consultancy Collinson Group), ensuring the benefits for both life-long customers and those new to the brand are made crystal clear is essential if M&S is to continue to rely on Sparks data to shape its proposition. But, above all, it needs to accept no matter how many members it entices, it simply can't get the answers to all of its ills from Sparks.
“Sometimes it’s the customers who aren’t engaged by a scheme that offer the best insight into how a business needs to change," added Pinnington.