Having spent the last few years, bringing the advertising for its two businesses – clothing and home, and food – together, Marks & Spencer has, in one management reshuffle, shifted strategy quite dramatically.
Patrick Bousquet-Chavanne, the marketing boss for the last six years, is out, as is marketing director for consumer and brand Rob Weston. And they will not be replaced. Instead, responsibility for marketing passes to each department under the leadership of Sharry Cramond in food and Nathan Ansell in clothing and home.
Bousquet-Chavanne and Weston join a long list of executives to be unceremoniously dumped under new chairman Archie Norman and CEO Steve Rowe. And it is hard not to jump to the conclusion that Norman – well known for his no-frills approach – sees advertising as a cost that can be cut. Marketing no longer has a place on the board, and it would be no great surprise under these circumstances to see advertising spend decline.
This shift in strategy might, however, be a good thing. The hope was that bringing its advertising together under one message would provide a halo effect across the business; suddenly people who had never shopped in clothing would be buying skirts and jumpers, while those at home among bedding and lamps would drift over and start buying lunch and dinner.
Yet this doesn’t appear to have happened. Over the Christmas quarter, like-for-like food sales fell by 0.4%, while general merchandise sales fell 2.8%. Total UK sales were up by just 1.1%.
Plus advertising the M&S brand is not where it’s big issues lie. The retailer may face a range of challenges – from the shift to online shopping to pressures on consumer spending – but its brand strength is not one of them. Its advertising investment has, for the most part, focused on its brand but there are other areas that need to hold its marketers’ attention.
M&S’s brand strength
The strength of the M&S brand is clear from YouGov BrandIndex. It measures M&S in three separate categories – food, high street retail and high street fashion – and across all of those it is the number one brand in terms of its overall index measure (which takes into account a range of metrics including quality, value and satisfaction). And it comes top in almost every metric, beating competition including John Lewis, Sainsbury’s, Next and Debenhams.
Brand Finance’s valuation of M&S also shows the brand itself remains strong. In 2018, it was worth $3.8bn to M&S; and while this is down from $4.2bn the year before and around $4.5bn in 2007 it is not where the real problem lies. That is in its enterprise value, which has gone from $22.5bn in 2007 to $9.6bn in 2018.
These figures all suggest that M&S’s real issues lie not in how the public perceives the brand, but in the reality of the brand when they go in store or online.
Campaigns such as ‘Leading Ladies’, ‘This is not just food’ and more recently ‘Adventures In…’ have all leant on love for the brand and tapped into the emotional connection it has with consumers. Slowly bringing that messaging together across food and clothing and home, culminating in the ‘Spend It Well’ campaign last year, seemed to make sense.
But the reality is major brand campaigns like this are expensive and do a job that arguably doesn’t need doing at M&S. What it needs to do is focus on product, customer experience and reaching consumers online, whether they increasingly shop. Both marketing and advertising must play a role, but they increasingly need to address the separate issues in its two businesses.
A deeper dive into YouGov BrandIndex shows some clear areas where M&S needs to focus its attention (and in the end its communications) to improve sales. In food, it has a real problem in terms of value; its score of -4.9 puts it 24th on a list of 26 supermarkets, ahead of just Spar and Waitrose. That is a key area the new M&S food team needs to address.
Moving on from big brand campaigns
Stuart Machin, who is set to join in May as the new MD for food, is expected to streamline its food offering, which has been increasingly complex in recent years and more expensive. Its products need to reflect how price conscious consumers now are and focus on true innovation.
In clothing and home the shake-up required is more dramatic. As Clive Black, head of research at Shore Capital, politely puts it, food has a “stronger cachet” than clothing. Like-for-like sales have barely been positive in the last six years; for the M&S turnaround to take effect that needs to change.
“There is the need for the greater focus that the new teams will no doubt be concentrating upon, probably leading with product and events over more generic activity. At the heart of success or failure will be product,” he adds.
“M&S needs to be more efficient, quicker, more responsive and more effective. While [CEO] Steve Rowe will no doubt guide the overall corporate and brand messaging, at the coal face M&S has to sell more.”
It is only in the last 15 years (since the appointment of Steve Sharp in 2004), that big brand campaigns havr really been back on the agenda at M&S. It didn’t advertise on TV at all between the 1970s and 2000s, and so when the ‘Your M&S’ slogan and logo launched it was a big shift for the brand.
And according to David Haigh, CEO at Brand Finance, it would be little surprise if M&S under Rowe and Norman went back to doing few, if any, big marketing campaigns.
“Archie and his gang may well have decided not to do above-the-line advertising and instead focus on digital, social media and getting the basic proposition right,” he says.
“They seem to want to get back to old values – everyday low prices, grinding out costs and not ‘wasting’ money on advertising and marketing. After all, they are in a turnaround situation. If you watch all the stuff the two outgoing marketers produced, it now seems a bit self-indulgent.”
If Norman and his team can turn M&S around and improve the proposition, that brand strength will help it find consumers willing to buy. But communicating that turnaround will be key, focusing on specific products and initiatives (much like Tesco has done under Dave Lewis), rather than big emotional brand campaigns.
“Given a good offer, that is well priced and focuses on quality, people will be inclined to buy M&S product. This is a great brand, it can be revived,” concludes Haigh.