This week’s reports show a return to decline for M&S sales. After a promising Christmas period, the retailer’s clothing business was hit particularly hard, slowing back down in Q2. Some point to a later Easter and the ever-rising tide of e-commerce as the biggest contributing factors in play.
It’s been a long, tough ride for M&S clothing but chief executive Steve Rowe also has much to be pleased about. For starters, the M&S brand remains first among women according to YouGov’s Brand Index (up 17 points from 2016, yet 6 points up on 2015), and is 10th overall in Britain.
That translated to a rise in clothing and homeware sales over Christmas (up 2.3% versus the expected 0.5%) – stronger even than its 0.6% rise in the increasingly competitive food sales market.
So M&S is undergoing a transformation to turn that brand value into sustainable profit, starting by selling more clothing at full price in order to maintain margins and avoid slipping into the domain of discounters.
While I applaud that decision, the retailer’s strategy to devote less store space to clothing strikes me as a missed opportunity. The trend towards online shopping is clear, but growing digital channels is only half of the story.
More intriguing for M&S, and the wider retail world, should be understanding how all that valuable physical space is put to its best use. The answer isn’t by selling off part of your estate.
Celebrating the browsers
First of all: e-commerce and physical retail aren’t mutually exclusive. Each has its place for the shopper, and by extension for the retailer. Understanding where your store or website fits a customer’s mindset is the key to unlocking the value of each channel.
Consider how we buy things: it begins with an idea, or a question. Maybe I want to get fitter, or I want more space in my flat, or I want to be a better cook.