That’s certainly the hope from CEO Steve Rowe who talks in terms of being able to “make the business special again”. He starts from a premise that there needs to be resetting of values:
It's always been the case that this business is best when it truly has the customer at its heart. And as we've done throughout history we deliver service which is truly personal, this is even more important in a digital age. We'll use a full range of mobile devices to help colleagues drive cross shopping, outfit building and deliver solutions for our customers. Much of which is on trial today. Essential to our brand philosophy has been contribution to the community. We'll be famous for this again.
The problem for M&S is that it just hasn’t kept up with the times and didn’t recognise the dangers posed by the likes of ASOS and Amazon to its high street offline model. Rowe now acknowledges the problem:
M&S continues to be disrupted on many fronts. We have competitors that were barely there a decade ago. In the digital space, some of platforms with vast product range. Some of our competitors global and now have a scale much greater than we have and that goes for food as well as for clothing. Customers today have more choice and more channels than ever before and therefore value for money is far higher up the agenda.
So there’s a need to play catch-up and that means taking digital a damn sight more seriously than has been the case to date. Rowe says:
We will build on our capability as a digital first business. As we look further to the future, we're clear that our online business will not be marginal to Marks & Spencer. We aspire to having about one-third of our business, our clothing & home business trading profitably online by 2022. With a broad network of pick up points underpinned by network capable of market leading fast fulfilment. That is what is being a digital retailer should allow us to achieve.
As part of this journey, we're clear we have to become a digital first retailer and improve our online proposition urgently across all devices. Our sites need to become faster and easier to navigate, we need to strengthen our search algorithms and make sure that our content is both functional and inspirational. This will mean delivering a seamless online and offline customer experience. Further development of our shop your way pick up proposition, home delivery and pick up store solution is also required as well as best in class fast delivery system.
Digital skilling up
And what about online groceries? After all, M&S Food is one of the few vaguely bright spots in the chain’s portolio. Rowe remains determined to dampen down expectations:
Food online? It's a very, very small draw. Two or three things here. This is actually very important. [A pilot has] gone live through our customers in couple of locations now. It is still very small. We're restricting access to site, we're restricting access in terms of post codes. We're pleased with the size of the basket that's come through. We're happy so far with the pick rates and delivery schedule. It's interesting, but it is very small at this stage and I would not want to draw any conclusions whatsoever from that.
But Rowe does see the food experiment as a good example of how M&S digital skills might come to the fore:
We started that program in April, we had no website, no app, no backing capability. The digital team has worked in a very agile way. We had a Beta test site available by July. We were live testing through the summer. It went live to customers by September and beginning of November, that is the new agile digital first M&S that I believe we must become, that's the sort of thing we're capable of when we do it.
In store, there will be further closures, but also investment in digital tech to improve the customer experience. Rowe says:
This will include areas such as scan, pay and go and Artificial Intelligence in customer communication and customer services. The use of new fitting room technology and more handheld devices [will be] rolled out to colleagues to make the operation simpler and improved customer services.
We have to build things with more flexibility and more plug-and-play if you like because they will change what we're moving away from though is great big platforms, great big systems [towards] much more cloud based technologies and much more flexible environments.
All of this is going to take some skilling up, of course, and that’s something that’s not been entirely addressed as yet, he admits:
We're still working on talent throughout the organization. We want to attract more digital talent. I think it's an area where we're short and we'll continue to pursue that. But we're changing the course with this. There’s lots and lots of very able and very good people in this business and we want to bring some new people into help.
Some of the skills needed will be in data management and analysis to make better use of data pulled in from the Sparks card loyalty program. Rowe explains:
Using Sparks we'll drive that data usage and deliver UK's best customer engagement programs. In terms of data utilization, Sparks is already 6 million members, but it's nowhere near its full potential. We will continue to build this program and our data analysis will become the glue that sits above our business units and underpins the brand. We will leverage our relationships through Sparks, M&S Bank and online to deliver a truly personalized shopping experience.
All of this is good in theory and Rowe is talking the right talk - but is it just too late? AsvLaith Khalaf, senior analyst at Hargreaves Lansdown, put it
The prioritisation of online sales can only be seen as a pretty late arrival at the party.