The latest disappointing results from M&S show us not just how tough the retail environment is for established brands, but also just how hard it is to change the shape of what a retailer of this size does. It is very much like the oil tanker analogy: it takes many miles to turn the ship.
And M&S CEO Steve Rowe acknowledges as much in the company’s results statement. Rowe is keen to point out that, while the results are somewhat disappointing, this is very much a work in progress and perhaps we shouldn’t be too quick to judge.
The company is in the process of closing 100 stores and is planning revamps of many of its remaining footprint. Rowe is also investing heavily in technology – both to streamline warehousing, shipping and online processes, as well as in-store (though that is more in the pipeline that right now) – and he is overseeing the immersion of 1000 staff in digital workshops.
The company is also following the lead of John Lewis Partnership to incubate sexy start-ups to deliver both new technologies and services, but also to show M&S management just how agile management can be, here in the 21stCentury.
If you ignore the figures and focus on ‘the plan’ at M&S, the picture is encouraging. The downside is that stores need to shut, people need to be laid off and other things need to be cut to achieve annual savings of £350million to bankroll this change. To achieve this, investment in in-store tech is, by Rowe’s own admission, being kept to a minimum right now – the focus instead being on leveraging its already growing online arm.
This is also a tacit nod to how online is perhaps the future, the stores being something that needs work.
However, M&S shouldn’t give up on its stores. The UK government has finally started to recognise that Brexit isn’t the only game in town and that the high street – and town centres in general – need some love.
Communities secretary James Brokenshire has promised money to help, but the real plan is to hope that private business – such as M&S – will help to rejuvenate town centres and high streets. Crumbling towns are being blamed for the rise in crime and loneliness – to name but too social ills – and retail has a role to play in making these town centres worth a visit. It isn’t just about ‘retail as a destination’, the plan needs entertainment and other aspects to work together to create attractive destinations for people, but it is a key part.
M&S’s reluctance – or fiscal inability – to do this right now is symptomatic of the whole retail industry, however. With retailers unable to do this, what chance the plan to rebuild city centres?
More worryingly, with retailers unable to act to up their in-store game right now, there is the risk that they drift ever-further behind what shoppers actually want – and in a year’s time will be so far behind that they will never catch up.
Peak season will show just how technology driven retail is this year – much of it mobile – and we will, in two month’s time, know for sure just what the real state of modern retail actually is and who the winners are going to be.
Image: Internet Retailing Media Services/Paul Skeldon