Marks and Spencer 2011 Annual Report Download - page 14

In June 2010 we established our
Consumer Barometer. Our CIU now
conducts a monthly online survey of a
changing sample of 4,000 people,
comprising non-M&S customers as well
as those who shop with us. We ask them a
range of questions: from how they feel
about their lives to spending patterns and
future plans. We complement these
findings with additional qualitative
research from a smaller group, which
provides us with more detailed insights.
This information helps ensure customers
are at the heart of all our business
decisions and this section shares some of
what our CIU has told us this year.
Market overview
2010/11 was another challenging year for
retailers and consumer confidence
remained fragile. Following a sharp
slowdown and then recovery during 2009,
confidence levels have fluctuated over the
last 12 months, as illustrated in the index
opposite.
This fragility was driven by a prevailing
sense of uncertainty. As we moved
towards 2011, consumers became
increasingly cautious about the economic
outlook as they considered the potential
implications of the new Government’s
spending cuts, VAT increases and rising
fuel prices.
Our Consumer Barometer shows
optimism is more buoyant, with
consumers showing a determination to
stay positive in the face of adversity.
Though the Government’s austerity
measures were widely anticipated and, in
the main viewed as necessary, consumers
reacted differently according to age. Mid
age groups felt their budgets have been
most squeezed, with families feeling there
was little room left for manoeuvre.
Pressure on household budgets meant
consumers remained selective in their
spending – determined to take control and
prioritise the things that matter to them
most. In this climate consumers turned
tothe brands they trust – seeking the
reassurance that they are making sound,
quality purchases.
Clothing
This year the overall clothing market
remained broadly stable. There was
growth in the mid-market, but the top end
and value sectors suffered, as customers
sought out affordable quality,
demonstrating they were prepared to
trade up. They adopted a ‘buy once, buy
well’ attitude – preferring to invest in quality
pieces they know will last.
At the same time, restricted budgets
meant consumers wanted retailers to
inspire them to spend on their wardrobe.
They searched for something new and
exciting to update their look and make
them feel special. Customers were
prepared to build their wardrobe with great
quality staples, like knitwear and denims.
However, they wanted clothing with a point
of difference; complementary to their
existing wardrobe but not multiple
versions of what they already owned.
Responding to this, we delivered unique
innovations and the latest styles. High
impact advertising campaigns and strong
visual merchandising helped attract
customers, adding interest and excitement
and confirming in their minds that M&S
offered great quality, exclusive products.
To give customers more of what they want we must understand the
way they think and how they behave. Our Customer Insight Unit (CIU)
uses a combination of customer analytics and research feedback
to spot trends and examine the issues that affect our customers and
the decisions they make.
Killer heels that don’t kill
OurInsolia® footwear technology
helps you to dance the night away by
reducing the pressure on your feet.
Ourlatest advertising campaign
highlighted this M&S point of
difference and sales of Insolia®
increased 186%.
Ç
Building the basics Good quality wardrobe staples
performed well this year as customers invested in
products that last.
Marks and Spencer Group plc Annual report and financial statements 2011
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