LONDON BRIEFING:CAN SHOP assistants armed with iPads revive the fortunes of Marks & Spencer? What about free in-store wifi or "browse and order" hubs on the sales floor, kitted out with the latest touchscreen ordering systems?
This is the technology-led vision of the future for M&S, unveiled last week by chief executive Marc Bolland, as he formally opened the retailer’s new store at Cheshire Oaks in Ellesmere Port, northwest England. It’s a monster of a shop – with 13,750sq m (148,000 sq ft) of selling space (the equivalent of 11 Olympic-sized swimming pools, according to M&S) – and it’s second in size only to the group’s flagship Marble Arch outlet in London.
M&S has long lagged behind retail rivals in its online offering and the high-tech aspects of the store are a key part of its attempt to play catch-up, the idea being that internet-savvy shoppers will use the in-store wifi and iPad facilities to research their purchases before buying and order anything unavailable in the store online.
As usual with retail, it’s not rocket science. The problem for M&S, though, is that its existing online operation is so inefficient, anything ordered in store will take up to five days to arrive. The group is in the process of upgrading its outdated online systems but a five-day wait is not quite what the internet generation expects these days. More to the point, however, is whether M&S ranges, particularly in its core womenswear offer, are sufficiently attractive that customers will want to buy at all.
M&S is still Britain’s largest clothing retailer but is widely seen to have slipped up badly with its product choices over the past few seasons. The fashion press has variously dismissed its ranges as “dull”, “garish” and “uninspiring” and customers seem to agree – in the past 12 months M&S’s share of the lucrative womenswear market has fallen from 10.9 per cent to 10.4 per cent. It also made major mistakes in buying earlier this year, failing to order sufficient quantities of what turned out to be its most popular lines, leaving it with stock shortages in coats, cardigans and ballet pumps.
M&S shares have been buoyed in recent weeks by takeover speculation, with the private equity firm CVC said to have been taking an interest. Despite the takeover chat, at 353p (446 cent), the shares remain below the 400p level at which Sir Philip Green pitched his offer in 2004.
Earlier this year, Bolland and his team suffered the indignity of seeing M&S’s stock market value slip below that of its younger, more fashionable rival Next for the first time ever. At last night’s closing prices, and despite the takeover talk, M&S was capitalised at £5.6 million compared with £5.8 million for Next.
Following its worst sales performance in three years, M&S announced a series of management changes over the summer, notably the departure of Kate Bostock, head of general merchandise, who quit “by mutual consent”. The woman now charged with restoring M&S’s fashion credentials is Belinda Earl, ex-chief executive of Debenhams, Jaeger and Aquascutum. Earl started her new job as style director this week and will focus on product for two to three days a week, according to M&S.
And yesterday, the group revealed it has poached Stephanie Chen from House of Fraser to head up its homewares and childrenswear divisions. Chen was responsible for developing designer ranges at House of Fraser and is credited with the successful relaunch of the Biba brand a couple of years ago. Like Belinda Earl, she previously worked at Debenhams.
The management shake-up in general merchandise has been well received by M&S’s followers in the City, as it demonstrates a determination by the group to get its product ranges right. Analysts who visited the Cheshire Oaks superstore last week were broadly impressed with the look and feel of it, but are unconvinced that the new concept, which will be rolled out to other stores, will be enough on its own to restore the group’s fortunes.
Many have concerns over the cost – with M&S’s capital expenditure forecast to reach £2.4 billion between 2013 and 2015, it is unlikely that the group will ever get its investment back, certainly not in the short term.
Given the current malaise of the retail sector, it’s a bold move by Bolland to launch such a massive store. But with the project having taken six years from conception to completion, the M&S chief executive had little room for manoeuvre on timing. And he admitted to analysts and journalists at the grand opening last week that if he could turn back the clock he would have made the store “a tad smaller”.
Fiona Walsh writes for the Guardian newspaper in London
