M&S chief outlines digital-first strategy after profits plummet
Marks & Spencer (M&S) is gearing up for a digital-first future, after its revealed on Wednesday (23 May) that profits had dropped a massive 62.1% to £66.8m compared to the previous year. A day earlier, the struggling retailer confirmed it will close more than 100 stores over the next four years. Ouch.
Chief executive Steve Rowe says as a business M&S hasn’t been agile enough – at a press briefing earlier in the week he described it as bureaucratic, too slow and too cumbersome – and said an accelerated change of pace is needed if the business is going to have a financially sustainable and profitable future.
Part of that involves moving at least a third of its business online. However, M&S has been slow to the digital race, meaning it will need to invest heavily – and quickly – in making sure its digital offering is as good as ecommerce retailers like Asos, which have had years to perfect the online customer experience.
Rowe knows there’s a long road ahead. If it were a marathon, he said, M&S would be at around mile three or four.
“We have to remember this is the scale of the journey we are on if we are to truly make M&S special again,” he added.
Bye bye, Tesco Direct
Tesco’s non-food website Tesco Direct will shut up shop in July – part of the supermarket’s efforts to simplify the customer experience and establish a more sustainable non-food offer.
Tesco said the loss-making business, which was launched in 2006 to take on Amazon, had faced a number of significant challenges – including high advertising costs – that had contributed to its closure. Approximately 500 jobs are at risk, mostly at its Fenny Lock fulfilment centre.
Charles Wilson, CEO of Tesco UK & ROI, said it was a “difficult decision” but an “essential step” to growing the business for the future.
Tesco will now begin the mammoth task of moving general merchandise, clothing and groceries to a single online platform, so customers will be able to buy homeware and toys through Tesco.com.
It will be interesting to see how the transition goes, how long it will take, how the finished website compares to the competition (see Sainsbury’s) and, importantly, whether it will have any impact on sales across the business.
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