Which is your favourite Marks & Spencer shirt? Perhaps you don’t know because you don’t own one.
Retail is detail, and the retail landscape is changing dramatically. Marks & Spencer (M&S), like many peers, is feeling the squeeze from both fast-fashion chains like Zara and online shops. M&S stores aren’t exactly inspirational and are in dire need of an upgrade. A former icon of British style and quality, M&S may do OK as a food brand, but for fashion? You decide. The list of M&S’s long-term issues is longer than its fashion cycles.
Ailing M&S has now dissolved its central marketing team and let its two top marketers, Patrick Bousquet-Chavanne and Rob Weston, go. Could Patrick and Rob have seen it coming? What can marketers learn from the M&S case?
M&S’s marketers did a lot to improve the brand’s long-term odds. They pushed the firm’s digital capabilities (yes, you can now shop M&S on Instagram). The Paddington Bear Christmas campaign was the nation’s most effective (if you trust the research by tech firm Unruly). And investment in its ’Spend It Well’ campaign was probably money well spent.
But at M&S, the pendulum has swung towards the short-term in a pretty big way. In its 2017/18 annual results, the firm’s high-margin UK clothing and home revenue contracted by 1.9%, its (lower-margin) food revenue was down 0.3% and group pre-tax profit dropped by 62%. The retailer has already replaced Marc Bollard as CEO, with Steve Rowe, as well as key managing directors and the chairman. Shareholder patience is running out. Rowe must produce visible results and he must do it now.
There’s no long term without the short term. And when short-term survival is on the agenda, no marketer will win admiration with long-term campaigns. M&S looks like a classic example of marketers who have dropped out of the ‘value creation zone’ (V-zone), where their work matters for both customers and the company. Bousquet-Chavanne’s and Weston’s work mattered for customers, but, it seems, no longer mattered for the CEO.
Every customer experience impacts on sales and profit, both in the short term (people buy something) and in the long term (people buy again). But in today’s fast-paced business environment, long-term brand equity building is an increasingly hard sell, especially if a firm is in a crisis.
To make the long-term case, marketers must first understand the real short-term pressures, align, and build the case from there. But keep in mind: short-termism comes in different colours.
‘Seize the moment‘ firms
Telecoms marketers at the turn of the century had a bottomless budget. The business was hugely profitable. Telcos were keen to sponsor every football club, golf tournament and Formula One race. It was ‘no questions asked’ marketing, all under the heading of long-term brand building.
But in reality, the marketing craze was often short term. What mattered for most top managers was the next cool thing. Telecoms have since been joined – and partly replaced in this space – by Middle Eastern airlines and tech firms.
In ‘seize the moment‘ firms, upholding a long-term brand equity agenda can be tough. The marketing ROI argument may not go anywhere when the CEO is simply keen to hang out with sports celebrities or have their logo at every airport (you know the companies I mean).
To stay in sync with the C-suite, marketers may have to satisfy that desire for short-term ‘cool’. One long-term investment in these companies is the push for consistency, so at least not all is lost. Then, it’s about slowly building the long-term case, for example, by putting in place measurements, because one day the pendulum will swing back. BT has just announced it’s going to lay off 13,000 staff. Even the coolest party ends one day.
‘Show me the money‘ firms
Supposedly, Amazon CEO Jeff Bezos once said that advertising only compensates for a poor product. At the ecommerce giant, the short-termism is all about tangible, immediate results (unlike its founder and his long-term ambitions). Marketers live in an A/B-testing world, surrounded by executives who only believe in the product and in last week’s campaign numbers. There will be very little immediate tolerance for long-term brand equity building.
Staying in the V-zone in these types of companies has clear rules. Do better campaigns each week, increase your ROI and perfect the A/B-test results, and you are fine. Well, almost. To help the company win in the long run, marketers must teach their colleagues how marketing influences longer-term metrics like familiarity or brand preference – and, ultimately, sales. That can be hard work, but the long-term debate matters. Amazon’s marketers, at least, have got Bezos to feature in this year’s Super Bowl ads.
All other firms
In most organisations, the short term/long term pendulum keeps swinging. And people may not even agree on what marketers do in the first place. Here, marketing executives can’t assume anything. Instead, they constantly need to check what matters at the top and how marketing can support the firm’s priorities. Welcome to the home of most marketers.
Picture this: an airline CEO hires a new marketing director. The agreed goal is to make the brand attractive to younger travellers. A year later the business hits a wall, revenue stalls. The CEO scrambles to make the quarterly goals. What should the marketing director do? Keep spending, because it’s in the job description? Perhaps. But that might mean dropping out of the V-Zone in no time. Maybe it’s smarter to sit down with the CEO and relook at the goals.
Perhaps cutting the marketing budget or shifting to short-term price promotions is the right thing to do. Chasing the V-zone, for this marketer, is a moving target. She constantly has to stay on the case. After all, when the business tanks, job descriptions mean nothing.
Just to be clear: I’m not saying marketers should simply run with any CEO priority, no matter how misguided it is. The art of marketing leadership is to come up with a better plan – while not getting knocked over by the pendulum.