M&S boss reveals 5-point plan to re-establish brand among lost 'Mrs M&S' customer

But is it a case of too little too late? Analysts repeatedly warned during former chief executive Marc Bolland's reign that the business had lost sight of the core customer as it tried, in vain, to woo younger shoppers away from the likes of Primark and New Look.

Addressing a room of analysts and journalists for the first time as chief executive at the embattled retailer’s full-year results briefing in London today (25 May), Rowe laid bare his plans.

1. Product – “Our target consumer doesn’t demand the latest fashion,” Rowe admitted. So it will focus on making sure it has a good variety of the essential products people go to M&S for (think bras, shirts etc) as well as improving the quality perception across areas like fabric, fit and finish.
2. Streamline Range – The number of lines it carries is already down by 10 per cent year-on-year but Rowe wants to go further and instead buy key products with “greater breadth and quality”. The variety of brands it has – such as Autograph and Per Una – are also “under review”.
3. Availability – It’s already revealed changes to its merchandising schedule, but Rowe wants to get to a point where there will be full availability of its products at the beginning of each season.
4. Price – Last year, more than 40 per cent of all the goods sold in M&S were on some kind of discount; this, evidently, is unsustainable. Taking inspiration from the grocery sector, Rowe vowed to wean consumers off the addictive price reduction tactics. Instead there will be investment in lowering prices consistently. So, no more family and friends discount events or participation in ‘cyber discount days’ (it remains to be seen if it still participates in Black Friday). But the Sparks loyalty card will be used to deliver personalised offers to members.
5. Improve Service and Experience – Admitting it “went too far” in reducing staff to the detriment of the in-store experience, Rowe will be upping the number of store assistants in key areas over the coming year. Facilities such as the changing rooms and cafes will also be upgraded across the estate.

“This will be challenging in the short term as we regain lost customers and get them to revaluate brand,” he explained, warning of the likely knock to profits caused by his plan in the coming year (shares tanked by 31.4p, or seven per cent, to 413.4p on the news).

Targeting the right customer

Thanks to the bank of data it’s gathered from the Sparks loyalty card (now used by four million people), M&S has segmented its 32 million customers into three pillars – Occasionals, Core, and Top.

The five-point plan will predominantly aim to re-engage with its seven million ‘Core’ customers – females, over 50 and dubbed ‘Mrs M&S’ – to “restore the love” they have for the brand and get them to shop more frequently.

But it’s the 22 million ‘Occassionals’ – the under-35s – M&S will have to work hard to woo; they shop infrequently and don’t have the same emotional ties to the brand as the other groups. Tie-ups with celebrities such as Alexa Chung and Rosie Huntington-Whitley go some way to keeping M&S in their view but it's unlikely that more activity in that vein will be heavily invested in.

Rowe was adamant that he hasn't written the younger shopper off, claiming “we’re a broad church” but said focusing on the 'Core' customer is the key to rebuilding the business.

“If everyone shopped just once more per week it would put an extra £100m into pot,” he later added to stress the importance of getting every group of customers visiting its stores more frequently.

Marketing then, has never been more vital to Rowe’s ability to make this turnaround plan a reality. A shake up of the marketing team and a review of the ad business in the space of one-month proves the new boss is serious about getting the message right when it launches a campaign later in the year.

“Patrick [Bousquet-Chavanne, director of customer and marketing] is already working on programme that enhances our value credentials. It will start to crescendo,” Rowe revealed.

Sparks data will also be indispensable. The brand has already used it to segment customers as well as reevaluate how it stocks individual stores but increased effort to harness the data to create a more joined-up marketing strategy will undoubtedly come.

It comes on the back of another year of "unsatisfactory" results. Profit before tax was down by 19.5 per cent in the 52 weeks to 26 March, despite posting a small 0.8 per cent rise in revenues to £10.4bn. Clothing and home suffered 2.9 per cent slide during the year.