M&S relaunched its website a year ago to focus more on content and publishing but has struggled with sales as customers complained the new site was more complex.
Sales at M&S.com remained in decline for the year to 28 March– with sales falling 2%. However its performance improved throughout the year with sales up 13.8% in Q4.
Speaking on a conference call this morning (20 May), CEO Marc Bolland said there has been a “clear turnaround” with the retailer constantly working to improve functionality, performance and speed.
He claimed checkout is now 30% faster and that performance metrics are up across the board with traffic increasing 15% and conversion up 60 bps.
“Conversion at a website that is more engaging, more entertaining will always be slower but conversion is up and customer satisfaction is up 18% compared to last year as people feel it is a more engaging website,” he said.
He said M&S has an aspiration to be “increasingly connected” and always looking at new channels that are “popping up” and how they can be used to engage with customer. M&S is working with Apple Watch on what its app for the device might look like, a conversation that Bolland said would not have happened four years ago.
M&S increased marketing spend by 13.5% last year as it relaunched the brand and boosted investment in TV advertising to communicate the “improved style and quality” in general merchandising and innovation in food.
That appears to be having an impact on the business, with total sales up 0.4% to £10.4bn and underlying profit before tax up 6.1% to £661.2m. That is an improvement compared to last year and the first time the retailer has grown profits since 2011, when Bolland took over.
Food remains the high point with like-for-like sales up 0.6% and total sales up 3.4%. This against declines in the wider market where the supermarkets are facing challenges as consumers shift to convenience, online and discount shopping.
Bolland said food had outperformed the market due to its focus on quality and innovation. He highlighted that 1,700 lines had been introduced or updated and said M&S planned to continue that work this year.
“This was an outstanding year in a difficult market. Why have we outperformed? Through a positioning we took 4.5 years ago, a strategy to step away from the supermarket territory. We are focused on quality and innovation. We will execute this specialist strategy even harder through newness and innovation.
“We are well positioned for market trends – for closer to home shopping, more frequent shopping and convenience in the way of shopping,” he added.
General merchandise remains the weak link with sales down 2.5% and sales at stores open fore more than a year down 3.1%. However the retailer highlighted the positive growth in the fourth quarter as a sign that its “improvements in product quality and style” are paying off.
Bolland cited research it has conducted with customers which found that perceptions of quality were up 6% while style increased by 4%. Profit margins were also up as M&S moved away from promotions.