As M&S gets set to overtake John Lewis, here’s how it finally reversed its fortunes
After years of sales decline, the M&S clothing and home division has reported record results. We look at how it is gaining back ground on its rivals.
‘Anything but ordinary’ M&S 2021 campaign
Last month, M&S revealed that its long-embattled clothing achieved its highest level of market share for over seven years, seeing a 15% uptick after a strong 2022 Christmas trading period. In the 13 weeks to December 31 the retailer grew its clothing and home sales by 8.6% on a like-for-like basis, sales increased 12.8% and online sales increased 0.7%.
In its 2022 half-year earnings total sales for home and clothing were up 14% like-for-like and operating profit before adjusting items was £171.4m that’s 33% higher than the 2021/2022 trading period.
A forecast released this week by Retail Week found it is now on track to overtake rival John Lewis in the rankings of the UK’s biggest retailers by 2026. It calculated that M&S has a compound annual growth rate of 2.7%, while John Lewis is growing by just 1.8%, meaning the rival retailers would swap places at seventh and eighth in the chart.
It’s an impressive turnaround after nine years of successive declining sales within the division. Keen to capitalize on the momentum, M&S is to invest £480m in building 20 new stores and creating 3,400 jobs at a time when department stores like John Lewis have been closing bricks and mortar sites.
So, after years of struggle, what has changed for the stalwart retailer? Until recently, M&S has struggled to work out who to aim the brand at – attempting to appeal to everyone but instead appealing to no one. It swung from honing its brand to target the over-50s to attempts at bringing in a younger generation of shoppers by inking partnerships with the likes of Alexa Chung and Rosie Huntington-Whiteley. “Insecurities in who they are and who they’re for led to year on year of repositionings and marketing approaches that never stuck beyond a few seasons,” explains Zara Ineson executive creative director, fashion and lifestyle at House 337.
But, she says, a new “wave of self-confidence is bubbling within the brand, thanks to a leadership line-up full of vision, conviction, and clarity.”
Much of this success is down to a leadership shakeup. In 2020, Richard Price was appointed as the clothing and home boss. Shortly afterward, Nathan Ansell, who had served in the business for nearly a decade, departed and was replaced by Anna Braithwaite as customer director.
Braithwaite had earned herself a reputation after a particularly impressive overhaul of the ailing F+F clothing division at Tesco, spearheading the ‘I only popped in for...’ campaign. She also relaunched Hobbs and Jacques Vert during her time as head of marketing at each brand.
Together, Braithwaite and Price immediately stripped back M&S’s product offering and moved to a model of advertising products, not brand, leaning into its reputation for quality.
Braithwaite also brought in a new ad agency. The account had previously been run by Grey London, but Braithwaite turned to ODD – the same agency she worked with on the 'I only popped in for...' campaign at Tesco. It introduced the ‘Anything but ordinary’ brand platform, which was anchored around the notion of staple quality items around its key categories of knitwear, denim, shoes and coats. When the platform was rolled out, Price said: “We’re reshaping the future of M&S Clothing with relevant products for how our customers are living and working – sustainably sourced items that offer trusted value.”
The new approach has served it well during the cost-of-living crisis. Ineson says practical, reliable, sustainable and trustworthy didn’t used to be “sexy words” in fashion, but nowadays consumers have shifted their habits towards “enduring” styles.
“We’re buying less but better and acutely aware of fashion’s impact on the environment. Undeniably, the values deeply rooted in M&S are the perfect foundation for a clothing brand today,” she added.
Picking the right influencers
Claire Humphris who is chief exec at agency Iris says that M&S finally feels like its found its audience and focussed “unapologetically” on it through a revised strategy. “From capturing key culture-shaping moments with celeb endorsements from the likes of the England football team and Holly Willoughby, Amanda Holden and Emma Willis, to maneuvering around its audience with a gentle integration of luxury food items alongside affordable fashion,” she said.
She says that its PR team has “nailed” it by ensuring relevant and on-trend pieces feature on the right social feeds. Humphris adds that its online presence has felt “highly accessible in a social world that pitches uber-rich ridiculous indulgences against us everyday folk.”
Overhauling the customer experience
But arguably, the most important factor powering its newfound success has been the significant investment M&S has made in the customer experience. This includes the introduction of ‘scan and go’ tech; revamping its app, which now accounts for around one-third of clothing and home online sales; ‘browse and order’, which serves customers in smaller stores and even its virtual makeovers in the beauty department; and a deal with a tech start-up called Texel that scans, captures and measures customers to recommend clothing that fits their frame.
In December, VCCP’s RX retail index report found M&S to be the second highest-performing retailer behind Amazon. It scored highly with the 3,000 consumers VCCP polled on elements like friendly staff, clear information and the speed and ease of its shopping experience.
Head of retail at VCCP Rob Sellers, who was behind the report, explained how M&S’s click-and-collect offering and its simplified clothing range have boosted the brand's reputation as a quick and easy retailer to buy from.
“All of that smart retail UX appears to be pulling in the right direction, so whether you think of it as a progressive retailer or not, it’s now doing everything at the level it needs to give people a pretty seamless and frictionless experience,” Sellers adds. “Maybe 10 years ago it felt quite stuffy and resistant to change. It’s not had a root canal but it’s just starting to do the right modern things well and that has started to work well together."
The final prong in the M&S success story is its renewed approach to working with other brands. It made the first move in 2020 with it introducing Nobody’s Child to its customers and has since expanded its offering to retailers like Ted Baker, Superdry, Lyle & Scott and Kate Spade. In October 2021, it doubled down on this with the acquisition of high-end retailer Jaeger and revamped it under the leadership of ex-River Island managing director Fiona Lambert. Sales of third-party clothing brands doubled in Christmas 2022 and accounted for 8% of M&S’s online sales.
This has worked incredibly well, Sellers says, because M&S’s own clothing brands made it “unshoppable” because “nobody has ever known what Per Una, Autograph and the likes stood for because M&S hadn’t invested in them.” But brands such as Ted Baker, Superdry already “mean something to people”.
The luxury of stocking third-party brands is that they already have their own marketing – “M&S doesn’t have to do any heavy lifting,” Sellers says. He adds that with the disappearance of Debenhams and House of Fraser from the high street, “someone has to fill the space”. It’s worth noting that five of M&S’s new stores were previously owned by Debenhams.
What’s next for M&S?
With improved financial results M&S is poised to invest further in customer experience as can be seen in its newly opened Stevenage store, which experiments with fitting rooms, lighting and navigation as well as self-service checkouts for clothing.
Executive creative director of Interbrand London, Sue Daun, said that M&S has successfully managed to innovate and stay true to its core brand offering of “value, trust and quality, but redefined in line with the changing needs of their customers.”
However, she adds that the retailer still has a “challenge” ahead. It needs to “ensure these great new additions” stay relevant to the “new breed of M&S advocates.” She advises the retailer to continue to experiment and partner with brands, entrepreneurs and external services. That, she says, “will build trust that this British icon is here for the future, not just the past.”