M&S on why it is deploying a start-up mentality to bridge the gap between offline and online

The launch of Marks & Spencer’s online personal assistant “Tuesday” is part of a wider strategy by the retailer to “step up” its digital investment a gear and move from a “low hanging fruits” plan to high risk/high reward activities. It is part of a plan by the retailer to “think outside the box” in order to boost loyalty and sales, but the brand must ensure it is still getting the digital basics right and not alienating its core customers.

Tuesday is a product of M&S’s digital lab which launched back in 2013 to enable the rapid development of in-store technology. In that incarnation the retailer launched “Style Board”, which allowed consumers to mix and match items to create unique styles, and its “Cook with M&S” recipe app.

After “proving its worth” the proposition was developed into “Venture Labs” around six months ago, according to its head of product Hemal Kuntawala.

The division aims to find solutions to make the M&S shopping experience “more joined up” across stores and online. Tuesday, one of its first projects, has 1,200 users and Kuntawala claims there has already been an increase in purchasing among those customers, resulting in incremental sales.

“We stepped it up a gear, from low hanging fruit to high risk, high reward activities,” he said. “We’re shifting from digital products to new business models to change the way consumers consume the categories we sell.

“We sell a lot of different things from sofas to sandwiches; they can all be sold in new ways. At the moment we have one website and one retail experience but some categories could arrive on your doorstep every day or month while others could have a nice concierge experience wrapped around them.”

Reigniting fashion sales

Reigniting fashion sales is a particular focus for Venture Labs after sales at M&S’s general merchandise division, which includes clothing, fell 0.4% in the three months to 13 June. The retailer wants to bring in a younger audience but also make it easier for all customers to find items to wear.

“There’s a bit of trying to bring in a younger consumer but it’s primarily about how we can solve issues for customers on what to wear and how to wear it regardless of their demographic.”

Hemal Kuntawala, head of product, M&S Venture Labs

“We want to find ways to continue the rapport that is built in-store. Someone might buy a jacket for a job interview and learn tips from an in-store sales assistant but that relationship ends as soon as they leave. Why can’t we put that sales assistant in their pocket?” questions Kuntawala.

The aim he said is to evolve how consumers engage with the brand. He admits not everything will succeed but Venture Labs is about learning quickly what works and what doesn’t.

“The aim is to use a lean start-up technique. We aim to do 10 things and expect nine to fail but the one that works we roll out. We want to come up with things we can scale and spin off out of the lab and become mainstream,” said Kuntawala.

Innovation in retail

M&S is not the only brand to launch a digital lab. Ryanair has one, as do both Tesco and Sainsbury’s.

John Lewis has its own start-up programme, offering investment and the chance of launching in its stores to a range of new companies in areas such as augmented reality and mobile payment.

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Jon Kershaw, head of strategy at Havas Media, says the introduction of Venture Labs and the Tuesday launch are a sign that rather than seeing innovation as a “one-off project” M&S is committed to improving the shopping experience for customers.

“As personal shopping becomes more prevalent on the high street, the creation of a digital service therefore seems a natural progression which delivers clear benefits to both brand and customer,” Kershaw said.

“The customer gets a bespoke shopping experience at their convenience and M&S gets an opportunity to make personalised product recommendations, build deeper brand connections, and gather data providing valuable insight into clothing shopper needs and motivations.”

However, Anusha Couttigane, senior fashion consultant at Conlumino, warns that M&S must make sure it is getting the basics right in digital. While ecommerce sales are growing strongly, that is from a low base and it is still behind rivals such as John Lewis and Debenhams in terms of digital development, she adds.

“They have tried out other digital innovations such as ‘Style Board’ but you can’t access that on mobile. There are basics that M&S need to get right first that they haven’t done.”

She also says that while she understands why the Tuesday website has no M&S logo it needs to make sure it isn’t alienating its main customers.

“I understand why they want to have services like this separate, on the fashion side they struggle to engage younger customers and be perceived as fashionable. But these are tools that are useful to all customers, if their main customers don’t know about them they are alienating them,” she adds.