M&S looks to augmented reality to boost GM sales

The retailer’s innovation hub believes success in digital can help take the pressure off traditional marketing by increasing word-of-mouth buzz.

In an intensely fierce retail environment where just about everybody is looking over their shoulders and seeing Amazon, Marks & Spencer isn’t alone when it comes to looking to innovate how it reaches shoppers. But with many questioning the historic British retailer’s long-term future, it perhaps needs to exercise more urgency than most.

In the three months to 1 July, M&S saw like-for-like sales for its struggling general merchandise business fall 1.2%. And although this rate of decline has slowed (it compares to a 5.9% fall in the previous quarter), the drop represents a long-term decline in the division.

Step forward Venture Labs. Set up in 2013 to bring a startup mentality to M&S, the division is all about using technology to drive buzz back into the retailer’s struggling fashion arm, as well as building on the success of its food business.

It has so far created services such as Tuesday – an app that uses an internal M&S stylist to regularly advise users on clothing based around their body shape and the season – and has two new app ideas at beta stage. Back in August 2015, Tuesday had just 1,200 active users. However, this has now risen to 50,000, with a long-term target to hit 1.5 million, according to Hemal Kuntawala, head of products and business models at M&S Venture Labs.

Speaking to Marketing Week, he says that Tuesday has resulted in a “considerable” rise in incremental spend among its 50,000 users. Better still, he adds, it has led to a “reappraisal of the M&S brand among younger shoppers who wouldn’t usually shop with us.”

Any successful app or innovation we create can take the pressure off our traditional marketing.

Hemal Kuntawala, M&S

And driven by the success of Tuesday, he says Venture Labs is now targeting new areas. “Our focus is always to start where there are pain points for consumers and then look to design painkillers,” he explains.

“Sometimes people don’t want to have to keep going back to a store so it’s about creating a utopia that merges both physical shops and ecommerce.”

When asked what this could look like, he responds: “If you buy a sofa you could start at home and use augmented reality to visualise and preview something in your living room before committing to buying it in a M&S store.”

He says there’s also an opportunity to apply the Tuesday app’s technology to food. “There’s lots of parallels between the wardrobe and the fridge, with certain weather dictating certain choices. If we advise people on what to put in their wardrobe then why can’t we do it for their fridge? M&S could advise on food choices for the week based on their schedule and activities, and really help to ensure they have a balanced diet.”

Venture Labs was signed off by previous CEO Marc Bolland. Yet, Kuntawala says current boss Steve Rowe is an advocate of the division and has ensured it has the full backing of his board even, if every idea isn’t a successful one.

He concludes: “They get that we might take a few wrong turns so there’s a healthy culture of test and learn here.

“What Tuesday has shown is that younger shoppers love the idea of curation, and that any successful app or innovation we create can take the load off traditional marketing. If we raise the bar then it will create happier customers and a word-of-mouth buzz. It means that the traditional brand marketing has less pressure.”

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