{"id":18167,"date":"2016-11-18T15:40:22","date_gmt":"2016-11-18T20:40:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/marks-spencer-innovating-an-old-fogey\/"},"modified":"2016-11-18T15:40:22","modified_gmt":"2016-11-18T20:40:22","slug":"marks-spencer-innovating-an-old-fogey","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/marks-spencer-innovating-an-old-fogey\/","title":{"rendered":"Marks &amp; Spencer: Innovating an old fogey"},"content":{"rendered":"<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"M&amp;S 2016 Christmas Ad: Christmas with love from Mrs Claus\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/V5QPXhStb5I?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 1<\/strong>: M&amp;S&#8217;s Christmas advert arguably\u00a0<a href=\"https:\/\/www.thesun.co.uk\/living\/2168889\/marks-spencer-launched-their-christmas-advert-2016-and-people-are-saying-it-is-better-than-john-lewis\/\">&#8216;won&#8217; the Christmas advert game this year<\/a>, but retail sales continue to slump as it rises to the challenge of an increasingly digital customer.<\/p>\n<p>Marks &amp; Spencer (M&amp;S) has a core presence on the UK highstreet: every Brit will tell you that it is the go-to place for socks, tights and underwear. While M&amp;S has remained steadfast as a quintessentially British, traditional, brick-and-mortar store, the UK retail landscape around it has evolved rapidly. Newer fast fashion entrants increasingly dominate the market, enrapturing younger generations, while M&amp;S clothing has struggled to define a target customer and keep up with appropriate trends. This competitive threat has been compounded by M&amp;S\u2019s slow response to the change in customer behaviour from in-store to online. Slap on legacy supply chain issues, and the combined effect is a multi-year sales decline in their clothing and home business, with same-store sales down 8.9% in Q1 earlier this year, worse than bearish analyst predictions (<strong>Exhibit 2<\/strong>) [1].<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Sales-slump.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-17936 size-full aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Sales-slump.png\" alt=\"sales-slump\" width=\"450\" height=\"237\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Sales-slump.png 450w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Sales-slump-300x158.png 300w\" sizes=\"auto, (max-width: 450px) 100vw, 450px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 2:<\/strong> Continued and deepening decline in M&amp;S sales [1]<\/p>\n<p>The retail group recognises the importance of digital in the turnaround of its clothing business, listing this as a top risk to future performance (<strong>Exhibit 3<\/strong>) [2]. Britons are the biggest buyers of clothes online in Europe [3], and increasingly expect retailers to deliver on the unspoken customer promise of a seamless omni-channel buying experience. A shopper may see a product in the shop window, browse it on a phone, make the purchase on a laptop, and pick up the product in-store. \u00a0So what has M&amp;S done to address this? Enter M&amp;S Venture Lab.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-17951 size-full aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority.png\" alt=\"digitisation-key-priority\" width=\"873\" height=\"519\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority.png 873w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority-300x178.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority-768x457.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Digitisation-key-priority-600x357.png 600w\" sizes=\"auto, (max-width: 873px) 100vw, 873px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 3: <\/strong>Adapting to changing consumer behaviour is listed as a top risk to future performance [2]<\/p>\n<p>&nbsp;<\/p>\n<p><strong>M&amp;S Venture Lab \u2013 \u201cthe need to evolve\u201d<\/strong><\/p>\n<p>M&amp;S\u2019 digital retail presence has had a tumultuous history. Until relatively recently, M&amp;S.com was not even owned by M&amp;S \u2013 it was run by Amazon. Then CEO Marc Bolland recognised that this was like \u201cdriving a rent-a-car\u2026If you want to win in the game, you never do it with a rent-a-car\u201d. With a \u00a3150M investment, the website was migrated, redesigned and relaunched on an M&amp;S-owned platform (February 2014), imperative in positioning the retailer for the future [4]. The new website encountered significant teething problems \u2013 confusing customers with its requirement for existing customers to re-register and technological glitches making it difficult to find products, and delivering orders to incorrect addresses. This received significant media attention and caused an avalanche of customer complaints (<strong>Exhibit 4<\/strong>).<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Customer-complaints.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-17953 size-full\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Customer-complaints.jpg\" alt=\"customer-complaints\" width=\"647\" height=\"293\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Customer-complaints.jpg 647w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Customer-complaints-300x136.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Customer-complaints-600x272.jpg 600w\" sizes=\"auto, (max-width: 647px) 100vw, 647px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 4<\/strong>: Frustrated customers vent on <a href=\"http:\/\/www.thisismoney.co.uk\">www.thisismoney.co.uk<\/a> [5]<\/p>\n<p>Learning from past mistakes of delaying investment in technology in the face of changing consumer behaviour, M&amp;S established a new unit: M&amp;S Venture Lab. This creative digital division uses lean start-up techniques to experiment ways to improve the customer shopping experience, exploring how they might shop in 5-10 years\u2019 time. Ideas extend to \u201ca post-PageRank world where every home has an AI-based assistant, or what garments we\u2019ll be wearing post-cotton (and how we might <em>print<\/em> them)\u201d. This internal experimentation, testing and scaling ideas with small budgets of thousands, is geared to internally building digital capabilities and products that they would otherwise expect to acquire later for millions to catch up with competition [6].<\/p>\n<p>An example project is TryTuesday.com, an online personal stylist (<strong>Exhibit 5<\/strong>). After a few initial questions, the user is introduced to their personal stylist who handpicks M&amp;S outfits\/items to solve the wardrobe problems the user is facing \u2013 tailored to their lifestyle, body shape, budget, and aspired look. The user is free to buy what they like and provide feedback on what they don\u2019t, the latter enables the stylist to understand their taste [7].<a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday1.jpg\"><br \/>\n<\/a><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-18053 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday.png\" alt=\"tuesday\" width=\"529\" height=\"299\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday.png 1057w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday-300x169.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday-768x433.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday-1024x577.png 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Tuesday-600x338.png 600w\" sizes=\"auto, (max-width: 529px) 100vw, 529px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 5:<\/strong> \u2018Tuesday\u2019 is an online personal stylist service; users upload a photo, answer questions in a one-on-one chat and can call their personal stylist to discuss their fashion needs [7]<\/p>\n<p>The virtual stylist addresses the greatest challenge retailers face: technology has replaced much of the human relationship between store and customer. Through Tuesday, M&amp;S can personalise the user\u2019s online experience, and regains the luxury of talking directly to an online shopper.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Looking ahead: Stores still matter<\/strong><\/p>\n<p>As the rate of digital sales increases, retailers are faced with the dilemma of what to do with their physical stores. The easiest solution to help their bottom line is accelerating store closures. M&amp;S appear to be doing this, with 60 planned branch closures by 2021 [8]. This can be short-sighted, as it diminishes their catchment area and reduces scale benefits. Looking ahead, the role of the store will still matter, as few categories will reach 100% online penetration, and shopping will continue to be a social and tactile experience [9].<\/p>\n<p>Instead, M&amp;S should focus on innovating their in-store experience. Their \u2018browse &amp; buy\u2019 in-store kiosks are a step in the right direction (<strong>Exhibit 6<\/strong>). These enable customers to scan bar-codes on items and order these in their size during stock-outs, or view and purchase items on M&amp;S.com which are not available on display [10].<\/p>\n<p style=\"text-align: center\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-18068 size-large\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel-1024x683.jpg\" alt=\"3008618_mands_multichannel\" width=\"640\" height=\"427\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel-1024x683.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel-300x200.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel-768x512.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel-600x400.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/3008618_MandS_Multichannel.jpg 2000w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 6<\/strong>: \u2018Browse &amp; order\u2019 in-store kiosks were trialled in the Cheshire Oaks outlet store before nation-wide rollout (see <a href=\"https:\/\/www.youtube.com\/watch?v=EEIGSCqYwEM\">here<\/a> for a video demo) [11]<\/p>\n<p>They can however, take this one step further with features such as interactive digital displays\/storefronts, touchscreens, magic mirrors or virtual dressing rooms, learning from industry leaders. Rebecca Minkoff, for example, are years ahead in their use of data and technology (<strong>Exhibit 7<\/strong>) [12].<\/p>\n<p style=\"text-align: center\"><iframe loading=\"lazy\" title=\"Rebecca Minkoff Connected Store Demo\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/6G3JIyG_GeY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p style=\"text-align: center\"><strong>Exhibit 7:<\/strong> Rebecca Minkoff&#8217;s flagship store in New York City demonstrates cutting edge use of technology in a brick-and-mortar store<\/p>\n<p>M&amp;S may have started off on the back foot, but it\u2019s never too late to teach an old dog new tricks.<\/p>\n<p>Word count: 799 words<\/p>\n<hr \/>\n<p><strong>References:<\/strong><\/p>\n<ol>\n<li>Paul Jarvis, \u201cMarks &amp; Spencer Sales Slump Worsens, Adding to CEO Challenge\u201d,<em>Bloomberg<\/em><em>,<\/em>July 7, 2016, <a href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-07-07\/marks-spencer-sales-slump-worsens-to-add-to-rowe-s-challenge\">http:\/\/www.bloomberg.com\/news\/articles\/2016-07-07\/marks-spencer-sales-slump-worsens-to-add-to-rowe-s-challenge<\/a>, accessed November 17, 2016<\/li>\n<li>M&amp;S Est. 1884 Annual Report and Financial Statements 2016. London, UK, Marks &amp; Spencer, 2016.<\/li>\n<li>\u201cE-commerce in the United Kingdom \u2013 Statistics &amp; Facts\u201d, <a href=\"https:\/\/www.statista.com\/topics\/2333\/e-commerce-in-the-united-kingdom\/\">https:\/\/www.statista.com\/topics\/2333\/e-commerce-in-the-united-kingdom\/<\/a> , accessed November 17, 2016<\/li>\n<li>Andrea Felsted, \u201cM&amp;S suffers setback from online glitches\u201d, <em>Financial Times,<\/em> May 20, 2014, <a href=\"https:\/\/www.ft.com\/content\/6acb1348-e030-11e3-9534-00144feabdc0\">https:\/\/www.ft.com\/content\/6acb1348-e030-11e3-9534-00144feabdc0<\/a>, accessed November 17, 2016<\/li>\n<li>Manuel da Costa, \u201cWhat went wrong with the Marks &amp; Spencer website redesign that made them lose sales?\u201d, <a href=\"http:\/\/www.digital-tonic.co.uk\/digital-tonic-blog\/went-wrong-marks-spencer-website-redesign-made-lose-sales\/\">http:\/\/www.digital-tonic.co.uk\/digital-tonic-blog\/went-wrong-marks-spencer-website-redesign-made-lose-sales\/<\/a>, accessed November 17, 2016<\/li>\n<li>\u201cWhat we do in the M&amp;S Venture Lab\u201d, <a href=\"https:\/\/medium.com\/m-s-venture-lab\/what-we-do-in-the-m-s-venture-lab-bef7c8d85078#.vm3ijkm9o\">https:\/\/medium.com\/m-s-venture-lab\/what-we-do-in-the-m-s-venture-lab-bef7c8d85078#.vm3ijkm9o<\/a>, accessed November 17, 2016<\/li>\n<li>Erica, \u201cThe secret high street styling service you need to know\u201d, <em>The-Edited<\/em>, September 25, 2016, <a href=\"http:\/\/the-edited.com\/2015\/09\/25\/the-secret-high-street-styling-service-you-need-to-know\/\">http:\/\/the-edited.com\/2015\/09\/25\/the-secret-high-street-styling-service-you-need-to-know\/<\/a>, accessed November 17, 2016<\/li>\n<li>Dan Macadam, \u201cM&amp;S to close clothing and home stores in turnaround plan\u201d, <em>BBC News<\/em>, November 8, 2016, <a href=\"http:\/\/www.bbc.com\/news\/business-37906466\">http:\/\/www.bbc.com\/news\/business-37906466<\/a>, accessed November 17, 2016<\/li>\n<li>Erika Serow, \u201cWhy Stores Still Matter in an Online World\u201d, <em>Bain &amp; Company Insights \u2013 Bain Video<\/em>, June 17, 2015, <a href=\"http:\/\/www.bain.com\/publications\/articles\/erika-serow-why-stores-still-matter-video.aspx\">http:\/\/www.bain.com\/publications\/articles\/erika-serow-why-stores-still-matter-video.aspx<\/a>, accessed November 17, 2016<\/li>\n<li>Ben Davis, \u201c11 ways M&amp;S is improving the multichannel experience\u201d, <em>Econsultancy<\/em>, February 21, 2014, <a href=\"https:\/\/econsultancy.com\/blog\/64379-11-ways-m-s-is-improving-the-multichannel-experience\/\">https:\/\/econsultancy.com\/blog\/64379-11-ways-m-s-is-improving-the-multichannel-experience\/<\/a>, accessed November 17, 2016<\/li>\n<li>Kate Doherty, \u201cAnalysis: How to leverage the subliminal power of music in store\u201d, <em>Retail Week<\/em>, February 8, 2016, <a href=\"https:\/\/www.retail-week.com\/topics\/customer\/analysis-how-to-leverage-the-subliminal-power-of-music-in-store\/7004508.article\">https:\/\/www.retail-week.com\/topics\/customer\/analysis-how-to-leverage-the-subliminal-power-of-music-in-store\/7004508.article<\/a>, accessed November 17, 2016<\/li>\n<li>Trips Reddy, \u201cRevolutionize Online &amp; Offline Shopping Experiences\u201d, <em>UMBEL, <\/em>May 18, 2015, <a href=\"https:\/\/www.umbel.com\/blog\/retail\/13-retail-companies-already-using-data-revolutionize-shopping-experiences\/\">https:\/\/www.umbel.com\/blog\/retail\/13-retail-companies-already-using-data-revolutionize-shopping-experiences\/<\/a>, accessed November 17, 2016<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can the 130-year-old retailer continue to give us \u2018magic and sparkle\u2019 in an increasingly digital world? <\/p>\n","protected":false},"author":1863,"featured_media":18204,"comment_status":"open","ping_status":"closed","template":"","categories":[2563,219,15,2564,16,897],"class_list":["post-18167","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-brick-and-mortar","category-ecommerce","category-fashion","category-high-street","category-retail","category-united-kingdom"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Marks &amp; 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