M&S: Omnichannel talk is cheap, results needed

Marks and Spencer is the quintessential British High Street store, perhaps even one of the most important bellwethers of the UK economy, which makes its struggle to recover from the Great Recession so concerning. So says Manu Tyagi, Associate Partner, Retail and Consumer Goods at Infosys Consulting.

M&S this morning posted a disappointing Q3 2018/19 trading statement. Since 2010, successive CEOs have tried to recapture the company’s lost glory through a range of three-and five-year “turnaround” plans. While these all read well on paper, progress has been painfully slow, especially compared to rivals such as John Lewis, which has recently boasted an increase in sales.

This failure certainly isn’t down to a lack of ambition or a refusal to embrace the opportunities of digital, Tyagi argues. In fact, six years ago M&S was one of the first retailers to announce significant investment in a “digital lab” with 150 dedicated professionals. From its Sparks loyalty programme to gamifying the in-store experience, it seems to be doing the right things.

It has, however, publicly acknowledged that it is behind the curve in digital. With 133 years of history behind it, it suffers from overcapacity, an outdated supply chain, significant rental, wages and operations costs which makes progress slow.

“This iconic British brand could easily turn its fortunes around if it can live up to its vision of delivering larger, digitally-enabled, better-located and inspirational stores for its customers,” Tyagi says.

“It’s saying all the right things about enabling more delivery options and enabling a seamless experience across the physical and digital worlds. But talk is cheap. Industry watchers will judge success on the evidence, looking for better clothing sales, growth in home delivery for food, and (perhaps most importantly) whether it manages to make its loyal consumers spend more either in-store or online.”