M&S is joining a growing roster of retailers offering new payment options to consumers, adding a ‘buy now, pay later’ option for its clothing line, in an attempt to compete with the likes of Asos and H&M.
The move comes as the retailer – which is still the UK’s largest clothes seller, just – has seen sales and profits slide consistently for the past seven years and its CEO Steve Rowe, admitted that the company had “lost 18 months” to the competition and that the introduction of letting customers pay for website orders in instalments was one of the “tactical actions” it planned to take to halt the slide.
Just last week Mothercare joined H&M, Asos and even niche retailer Pink Clove in offering these spread payments. The move is driven by young shoppers who want a more flexible way to pay. A nationwide study for Clearpay by YouGov, out last week suggested that UK Millennials want more innovation in retail and financial services – and are looking for more flexible ways to pay.
The approach is also being tipped as one of the reasons why H&M has turned in its first profit in two years, logging an 11% increase in sales and a 6% rise in profits across all its markets. Adapting to changing consumer habits clearly pays off.
Commenting on the move by M&S, Paul Kirkland, Director of Retail and Hospitality at Fujitsu UK&I, says that this is yet another sign of the difficulties facing the UK high-street, and what retailers need to do to drive consumers back into store.
“This move from Marks & Spencer is a clear indicator that high-street retailers are feeling pressure from online competitors, and are looking for ways to match their convenience for consumers,” he says. “With seasonal sales and in-store events no longer driving footfall, it’s crucial that retailers evaluate everything from their online strategy and the technologies supporting this, to supply chain and store autonomy, to ensure they can recapture high-street custom, while competing effectively in the ecommerce space.”
He continues: “To do this, retailers must begin viewing their stores as a platform for discovery, engagement, experience and interaction, with the goal to use online sales to help drive people in-store. While our recent research found that 40 per cent of UK customers feel that the high-street has been too slow in adopting technologies, technology is providing solutions here; whether it’s leveraging predictive analytics to build a responsive and speedy delivery network to using augmented and virtual reality to immerse people in an engaging experience.”
“Beyond this,” says Kirkland, “retailers need to give their store colleagues more autonomy to make better business decisions, which enhance the customer experience. Whether that’s being able to choose a tailored store stock, ensuring that stock is available via the right channels or better using data to drive personalisation. These investments will help bring customers back onto British high streets, and boost revenue in the long-term.”