M&S makes online changes as sales disappoint

Marks & Spencer’s (M&S) online operation said today (6 November) it will be trialling 11pm cut-off for free next-day-to-store delivery, as it looks to attract more digital shoppers.

The business is currently putting the building blocks in place to be a “digital-first” retailer and shift its organisation so one-third of UK sales come from online, but first-half figures released today have brought to light the challenges it faces with this strategy.

Online revenue at M&S.com for the 26 weeks to 28 September increased by 0.2%, which the retailer said was less than planned. It attributed the sluggish performance to “issues with availability and product mix in a slower online market”.

M&S said traffic to the website during the period grew by 8% year on year, reflecting strong growth in mobile traffic and paid search, but it admitted conversion was lower than it had been previously. 

Other digital changes that it has implemented recently focus on enhanced search and personalisation, while the retailer also announced last month that it has launched a pay-by-instalments facility with Clearpay. Buy-now-pay-later services are growing in popularity across wider retail, and M&S has joined the party as it looks to provide an array of options for customers at the checkout.

These developments in relation to M&S.com come against a backdrop of falling revenue and profit.

Group revenue of £4.86 billion for the half-year period was down by 2.1%, with profit before tax and adjusting items down by 17.1% to £176.5 million.

M&S said its food business, which will be augmented by the new partnership with Ocado from next year, is on track. Total revenue was up by 1.2% and like-for-like revenue edged up by 0.9%, with second-quarter trading apparently showing signiifcant improvement and outperforming the wider grocery market.

The company admitted, in a declining market, it underperformed in clothing and home where revenue was down by 7.8% – or by 5.5% on a like-for-like basis. M&S said it experienced availability challenges across both sales channels, “as a result of supply chain issues and a shape of buy that remained too broad”.

It said there are plans to operate with fewer SKUs, phases of stock and less markdown are being put in place – partly through some significant supply chain modernisation – so that M&S can focus more clearly on “contemporary styling”.

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