M&S admits online remit “well behind” competitors

Marks and Spencer (M&S) has admitted it knows its website and online fulfilment capabilities are “well behind the best” of its competitors, but has seen an increase in online sales of its home and clothing ranges since introducing digital transformation plans.

During its half-year results, the retailer said steps taken to improve its website experience has led to a 9.1% increase of online sales for UK clothing and home goods.

Although the firm is still struggling with technology and the supply chain, it still found 20.4% of clothing and home goods sales are now made through online channels, a growth of 2.2% since the beginning of the year.

Steve Rowe, the firm’s CEO, said the retailer would be leaving “no stone unturned” while it undergoes transformation.

“This phase is about rebuilding the foundations of the future M&S and we are judging progress as much by the pace of change as the trading outcomes,” he said. “Already, we have reorganised into a family of strong businesses in the biggest change to our structure for decades. We now have a largely new, very determined and energetic management team in place. M&S is becoming a faster, more commercial and more digital business.”

The retailer is still focused on reducing its store estate, as well as “fixing the basics” of its online remit.

As well as working on its online channels, the firm is working on updating legacy systems, as well as developing its supply chain and distribution capabilities.

Work has been taking place to increase its focus on digital over the past few years, and most recently M&S created a chief digital and data officer role in December 2017, filled by Jeremy Pee, to better develop the use of customer data in loyalty programmes.

This was followed by a partnership with Decoded to teach more than 1,000 of its employees data skills, such as knowledge of machine learning and artificial intelligence (AI), as well as help them become more data literate.

The retailer also partnered with Founders Factory and True Capital with the aim of investing in retail startups that may be able to help speed up its plans for digital adoption and transformation.

But despite this, the firm is still experiencing teething issues with technology adoption, and in the first half of 2018 scrapped some plans for further IT development due to problems with new systems, including its warehouse management systems.

Eventually the high-street staple hopes its digital transformation push will help it to save in the region of £30m a year by 2021, by streamlining its operations and simplifying relationships with technology suppliers.