New M&S boss Rowe says Sparks card will ‘improve marketing’ as its fashion sales fall once again

As M&S fashion sales fall once again over its fourth quarter, new chief executive Steve Rowe insists the brand’s Sparks loyalty card scheme will be crucial to helping it build better marketing and relationships with its customers as he aims to turn around the business.

For the 13 weeks to 26 March, M&S reported a 2.7% decline in like-for-like sales in its struggling general merchandise division. Although this was better than City analysts’ consensus of a 3.4% decline and a third quarter decline of 5.8%, it still means M&S has seen falling clothing sales in 18 of the last 19 quarters.

Speaking on a press call this morning (7 April), Rowe, who only started as CEO this week, said gaining a “deeper understanding” of customers would be crucial if M&S was to turn things around in GM.

He told Marketing Week: “Fortunately we have a fantastic customer insight device through Sparks, which already has 4 million people in its loyalty programme, up from 3.5 million in the Autumn.

READ MORE: Three ways the new M&S Sparks loyalty card can reignite its fashion business

“We want to use Sparks as a tool to reach out to our customers and to inform all of our new marketing campaigns. It will enable us to improve and have even deeper insight into how our customers are thinking and shopping.”

Outlook for 2016

Last month, Next’ chief executive Simon Wolfson said 2016 would feel like “walking up the down escalator” for British retailers as he predicted dire trading conditions. Rowe, however, says the M&S view on customer confidence is much more positive than that of his high street rival.

MS_sparks
M&S is confident the customer insights it gains from the Sparks loyalty card can create better marketing

“I think when you look at customer confidence, it is taking a little dip in the last month or so mainly due to external and economical factors,” he responded to another Marketing Week question asking whether things would get worse in GM before they got better.

“But in my view, customer confidence still remains high. There is a lot of self-help we can do at M&S to improve our performance and that is what I will look at when I focus on strategy.”

More competitive prices

This self-help, he says, will be driven by M&S becoming ‘more competitive’ on price.

Rowe, who also heads up the retailer’s fashion division, said M&S adopted a new pricing programme in Spring as it reduced the prices of around 300 lines across clothing and homeware.

He revealed that by reducing black jeggings from £19.50 to £17.50, M&S sold an additional 30,000 units and saw sales increase a whopping 230% year-on-year.

In menswear, the price of basic white t-shirts also came down from £7.50 to £6, which helped sales to grow by 40%. Rowe said the average price of its core promoted womenswear range ‘True Blue’, meanwhile, also went down from £40 to £35.

“There are clearly more games we can play on price to become more competitive.”

M&S’ CEO Steve Rowe

“Ultimately, [the brand] has not been as stylish as it needs to be or had the availability people have wanted, but we’ve started to make changes in GM.”

“Turning around our clothing and home business by improving our customer offer is our number one priority.”

Translating food success into fashion

Screen Shot 2016-04-07 at 09.08.57
M&S has struggled to secure sales growth in its fashion over recent years

Although growth was flat, food remained the shining light for M&S in its fourth quarter.

Marks & Spencer’s food business posted flat like-for-like sales growth for the quarter as total sales rose by 4% and its share of the grocery market grew to 4.3%.

Food sales were boosted by 80 new store openings and a strong Mother’s Day performance while the retailer said that it had launched 400 new food lines during the quarter.

James McGregor, a partner at Retail Remedy, believes Rowe must now translate the strong performance in food over to general merchandise.

He said the market had a “good feeling” about the new M&S CEO, largely due to Rowe having experience after being at the retailer for more than 26 years in various roles across areas such as ecommerce and food.

He added: “We have a good feeling about Rowe; he has spent time in stores, has delivered food success and has started his first week in the best possible place, in stores with colleagues and customers.

“But it would be refreshing for the availability of the marketing success fashion pieces to be translated into sales.

“If they translate the quality of food sourcing into fashion; superior quality fabrics from sustainable sources, knits that don’t pill, buttons that stay attached to fashionable ranges and M&S has an inherent value positioning that they can get back to.”

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