The fashion brand Marks and Spencer (M & S) belongs to the fashion retail industry of British multinational retailers. In the fast fashion industry, there are many issues revolving around. So, why not dig deep in to it for a more analytical understanding ?
Analysis of the Current Situation
Product and services of M & S
The main business that the company, M & S started the business with is related to fashion and gradually they have surpassed all the levels of modern trends of marketing. Marketing in the fields of food and retail business has been experienced by this company. Due to this reason, extreme popularity has been accounted for by the customers of M & S and slowly they have become the leading department store and a supermarket brand. Their services ranges from M & S food, M & S corporate gifts, M & S Bank, clothing for men and women, M & S Energy, household and cosmetics items.
In the year 2020, the revenue figures exceeded almost 10.2 billion British pounds but due to COVID, the growth has decreased to 8.4 billion British pounds. They also do not possess a great position in the UK grocery market as a leading brand. But they have tried all the possible ways to strengthen their businesses and one of them is a joint venture with Ocado retail business. Since, they have not expanded in the online platforms greatly, clothing, food and home product business sales have all fallen. Moreover, there are many companies such as Asos, Boohoo, B & M, Pets At Home, JD sports and many more which are capable of giving tough competition to M & S from various perspectives. The sales online through the offline stores are a market idea and strategy that has been developed by B & M and by this strategic choice they have 250 million dollar sales growth. On the other hand, Basket sizes at M&S are extremely tiny and the access to products to a great extent is also very difficult for the customers of M & S. This is the reason the company have made partnership with Ocado. Ocado is a business and this partnership has been made by M & S for food delivery in the online realm. There are change of share value that both these companies have shared with one another. The below graph is a simple representation of that.
Ocado will have a full access to M & S database for online delivery of products. There are problems with regards to low average spend and this is the reason why M & S have made partnership with Ocado. Competitions largely on price segments have been utilized by many companies and this is the strategy that these other retailers use in the market.
Competitors
Assos and Booho are the online rivals of M & S because these two companies give profit forecasts twice a year. With the rise of online shopping, Primark is a company that threatens the sales of M & S as well to a great extent. On the other hand, grasping which products are on-trend and which seem boring to the people is acquired quite brilliantly by Zara. On the other hand, the focus on digital and sustainable transformation is the main idea that Zara imposes on the brand and due to this reason they grow in terms of sales. The COVID situation has been one of the reasons why the trading ratio has declined to a huge degree for a top-ranked publicly listed company, M & S. For example, a sales loss of £ 87.6m has been seen in the year of 2020 and due to the loss the company has initiated a job cuts plans. This plan of job cuts is not a problem for only M & S but there are many similar companies which have taken this approach.
The restriction plan and cost-cutting plans have been initiated by many retailers namely Boots, John Lewis and M&S. These companies shed thousands of head office jobs and as a result, sales decline issues have been presented. Due to the poor level of availability in the stores, the sales growth has declined for M & S. Thus, it has been claimed and condemned as an out of date supply chain. Slow-moving lines, fewer orders and less stakeholder engagement can be counted as their bad efforts in increasing the sales. The popular sized clothes have sold from the company stores way too quickly and this is the main reason why a 5.5 % decline in like-for-like clothing sales has been accounted for. Therefore, casual clothing sales accounted for a 53 % sales decline after the lockdown.
Moving the products to the country is one of the issues and due to which sales growth has been presented in the company. However, there are areas where the company shows great signs of success including schoolwear, denim and lingerie. For example, complicated and slow logistics are the main reason for the impact in the sales ratio. A devastating performance in the websites of M & S is also seeing less growth as they have already cut off jobs from 120 full-line stores. High street crisis is a big issue that is created due to fewer sales growth and for making the business available in the high streets they need investment which they lack. The M & S company claimed that their product ranges in fashion target the younger generations but the report says that the product is old and out of fashion and due to which customers do not like them any more. This is also one of the reasons why sales have decreased for the company in the UK stores. The company M & S have shifted their focus from offline stores to online and this is a step that is a mistake for a company like them. Since the growth has been there and the business model is not online from the very beginning then due to uncertain situational change, the company does not need to prefer the online mode for a business as a whole. However, the new designs and the new product ranges can be inculcated so that the customer can be enticed by the new product ranges.
Key success indicators
The company has a lot of stores in the UK and this is the reason why these stores can be optimized to a great extent as a response. For example, these stores and the revenue generated from them will be a profitable matter but using the stores in a fast fashion trend manner would be a solution. For example, they can use new trends in the stores and by which the growth of the customers, in turn, will generate profit. The stores need technology and its inclusion and this is the pull strategy similar to which has been integrated in the H & M company with mirror. The customer needs a trigger through which they become tied with the brand. Hence, the inclusion of technology can be a great option. In these big stores, they can use the denim collections, lingerie as well as schoolwear as these are the strength of M & S.
