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Marks & Spencer online sales fall 2% in a year after customers took time to warm to its new website

M&S says strategy on track as it reports rising online and offline sales

Marks & Spencer today said online sales had fallen 2% in a year that saw it launch its in-house developed platform and in which its new Castle Donington distribution centre experienced disruption.

The retailer, ranked Elite in Internet Retailing’s IRUK 500 research, today admitted that the new site, though technically resilient, was ‘a bigger change for our customers than we had anticipated”, and that hit sales. “We worked hard to address this,” it said in its full-year results statement, “and made a number of updates to improve the shopping experience.

It also made improvements to its logistics systems and management after disruption at the distribution centre

But while ecommerce sales fell in the first three months of the year, they returned to growth in the fourth quarter. At the same time, said M&S today, traffic grew by 15%, customer satisfaction by 18% and 7m new shoppers registered on the site. “Our M& website and ecommerce distribution centre will help us drive online sales growth and improve our profitability,” said M&S.

Across the business, the retailer reported total sales of £10.3bn in the year to March 28, flat compared to the last year. Within that, UK sales rose by 0.7% to £9.2bn while international sales slipped by 5.7% to £1.1bn. Pre-tax profits of £600m were 3.4% up on last time.

In its home market, the retailer enjoyed growth in food, up by 3.4% in total, and 0.6% on a like-for-like basis, but general merchandise sales fell by 2.5% in total, and 3.1%, like-for-like. In the final quarter of the year, however, general merchandise sales returned to growth as online sales lifted.

Chief executive Marc Bolland said the company had made “good progress” in its key priorities for the year. “We are transforming M&S into a stronger, more agile business – putting the right infrastructure, capabilities and talent in place to drive our strategic priorities.”

Commenting on the figures, Julie Palmer, partner at Begbies Traynor, said: “Through investing in the Group’s store portfolio and product innovations, while bringing in the help of top designers and celebrity endorsers, M&S’s designs have achieved their goal of winning over both the fashion industry and discerning shoppers alike. In addition, it appears after the Christmas chaos of last year as M& had to delay deliveries by up to two weeks, the froup has finally got its ducks in a row for its online platform as sales were back in growth for the final quarter.”

John Newbold, creative director and co-founder of digital product and servic studio 383, said: “The future is digital, and the signs are that M&S is starting to realise that, even if its pivot away from the Amazon platform hit website revenues in the short term. Owning their own platform should enable them to bring more improvements, more quickly, than in previous years.

“The creation of M&S Venture Labs, which recently prototyped an app for the Apple Watch, is a step in the right direction. However, its effect on the bottom line will rely solely on M&S’s ability to move ideas and experiments out of their lab and into real world experiences which are delivered at scale for all their customers. Particularly given similar lab efforts from brands like John Lewis with their ‘JLab’ initiative already seeing products being rolled out. Overall, it’s digital outcomes, not concepts, that will move the needle for the business when future numbers are released.”

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