Marks & Spencer says its marketing played an important part in returning its struggling fashion business to growth over Christmas, pointing to its wool credentials and Mrs Claus Christmas campaign.
The retailer posted a rise in clothing and homeware sales over the Christmas period for the first time in two years. Like-for-like sales were up 2.3% over the 13 weeks to 31 December, while its food department saw a 0.6% rise in sales. The overall UK division saw a 1.3% rise in same-store sales.
M&S credited some of the the growth to the timing of Christmas 2016, attributing around 1.5% of clothing and home sales growth and about 0.3% of food to this.
M&S CEO Steve Rowe said on a conference call this morning (12 January) that the positive results reflect the actions the company has been taking by becoming a “simpler, more customer-focused” business and pulling back on promotions.
The key thing is that it’s a self-help story. There are lots of things that need fixing and we are on that journey.
Steve Rowe, M&S
“In clothing and home we delivered against our promise to focus on full-price sales and improve our ranges. We lowered prices on hundreds of products and had far fewer promotions. We just had one clearing sale starting on Boxing Day,” he said.
“Food was a premium Christmas, which played to our strengths as we focused on special and different products growing our business in a tough market. We offered our customers over 300 new food products.”
Despite its Christmas growth, Rowe remains cautious about the future and admits there is “lots more to do” for the brand.
“The key thing is that it’s a self-help story. There are lots of things that need fixing and we are on that journey. In Q4 our reported numbers will be impacted by sale timing and a later Easter. We do expect the market to be challenging, and consumer confidence is uncertain. But we do believe that our plan is the right one for M&S,” he added.
Crediting its marketing for growth
Speaking to Marketing Week, Rowe said that its marketing played an important part in winning back customers, pointing to its ‘Mrs Claus’ Christmas campaign and also a focus on wool.
“We started out strong by endorsing our wool credentials in ads earlier in the year. Wool sales were up across the business by more than 7%, which is excellent. The Mrs Claus campaign also really resonated with our consumers – the hashtag #loveMrsClaus had more than 45,000 tweets which is great,” he said.
Overall, Rowe believes the brand’s improved fashion sales comes down to it doing “the basics very well” and focusing on contemporary style.
“The red jumper Mrs Claus wore in the advert [was very popular] and resonated with customers. It’s about getting those wardrobe essentials right at the right place and with the right availability in a great store environment. And it worked,” he explains.
To ensure M&S keeps growing its fashion division, Rowe said the business will “stick to knitting” and continue to improve its products, quality and availability of stock in store and online.
He added: “We are working down a plan which is about making sure this business is focused on our customers and what they want, and we are continuing that dialogue with our customers all the time.”
Thinking online first all the time
M&S online sales, while not disclosed in the report, were “broadly” in line with the rest of the market, claimed the retailer, and were boosted by its decision not to play as strongly in promotional events such as Cyber Monday and Black Friday.
When questioned by Marketing Week on whether the brand will have to be more digital-first to keep customers coming back, Rowe said it already “thinks digital all the time”.
“More than 30% of our traffic comes from the mobile phone app. Mobile is the fastest growing way of connecting with our online channel and 62% of what is sold online is picked up in stores. We think digital all the time,” he said.
M&S is not the only high street brand to have posted strong Christmas results. Debenhams saw like-for-like sales grow by 5% over the seven-week Christmas period to 7 January, while online sales increased by 17%.
But Next didn’t fare quite so well. It had to issue a profit warning earlier this month after full-price sales for the 54 days to 24 December were down by 0.4%. Sales at its end-of-season sale, which runs from Boxing Day and typically pulls in customers, also slumped by 7%.