Marks & Spencer Aims to Turn the Tides on Falling Profits with Focus on Digital
In a change of tactic to halt its downward profit slide (which dropped for the third year in a row), Marks & Spencer is now focussing on digital as its priority.
Despite high-profile campaigns such as Leading Ladies which helped boost their Womenswear sales in the fourth quarter, M&S has cut its overall marketing budget by 4.9% (from £155.3m £147.7m in the 12 months to 29 March).
The retailer now aims to put digital at the heart of its marketing. Over the past three years, M&S has undertaken a three-year turnaround strategy which has included launching its 2013 Christmas ad on social media before TV for the first time ever, and a major investment in its website (relaunched earlier this year).
Although the benefits of the new website in terms of profitability are not expected to show themselves for at least another three months, M&S is strongly aiming to gain increased share of the estimated 19m shoppers who buy online but not with them.
Nevertheless, Managing Director at retail analyst company Conlumino, Neil Saunders, has voiced a key point that M&S could be missing: "There is a saying among climbers which M&S should heed - it isn't the mountain ahead that wears you out, it's the grain of sand in your shoe. The grain of sand in M&S's shoe is a continued lack of vision and ambition on clothing and, in particular on Womenswear. Until it is removed, once and for all, M&S's advances will be limited."