Marks and Spencer 1998 Annual Report Download - page 22

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United Kingdom
CONTINUED
OUR SOPHISTICATED USE OF TECHNOLOGY IS CENTRAL
TO DELIVERING THE SERVICES THAT CUSTOMERS WANT.
building new stores. In each case we seek to
make the store cost-efficient, easy to
manage and sympathetic to its
environment.
The new space allows us to accelerate
fresh approaches to displaying
merchandise. More stores will feature a
larger, dedicated department for home
furnishing. It will be easier to give greater
prominence to departments such as
menswear. Indeed the newly acquired
35,000 sq ft store in Marble Arch will only
sell menswear. Already stores are benefiting
from closer working between display and
sales supervisors and we are better
integrating merchandise across
departments.
DEVELOPING SUPPORT SYSTEMS TO
SERVE OUR CUSTOMERS BETTER
We are substantially increasing investment
in information technology to drive sales,
enhance customer service and improve
efficiency. M uch of this investment is within
stores, either through the roll-out of more
efficient tills or through more sophisticated
stock and customer ordering systems.
Technology is central to delivering the
services that customers want. For example
in-store ordering, whereby customers can
have any St M ichael product delivered to
their local store within 48 hours, now
represents 3.5% of our sales. Effective
systems keep costs down in this growing
area of business. So, too, with direct mail,
where our major move into the clothing
mail order business depends on advanced
technology – not just to protect margins
but also to deliver the innovation and
reliability which build custom. M oreover,
systems need to be integrated. We have
linked our mail order fulfilment service
directly with other operations so that
telephone order-takers can automatically
process any assortment of goods in one
transaction.
Store technology also has a positive
impact on profitability. Already one quarter
of the adult UK population visits a M arks
& Spencer store each week, while our
Account card gives us a known base of five
million households. By using information
more precisely, we can better target
customers with offers that appeal
specifically to them. Consolidating and
segmenting databases is a key priority for
the Company.
ENHANCING DISTRIBUTION TO SUPPORT
GROWTH AT HOME AND ABROAD
We are strengthening our logistics
capability to meet the demands of
expansion. Our strategy is to minimise non-
selling activities in stores by preparing stock
in warehouses, increasing paperless
transactions and consolidating
administration regionally. We have
enhanced our systems for merchandising
and distributing food products in
continental Europe.
We are also developing ways to establish
international centres for servicing the
Group’s overseas operations. As our
worldwide business grows, we are sourcing
more products from local markets. The UK
can no longer be the centre of all
distribution – we are now researching a
system which allows us to buy goods in any
country, in any currency, and distribute
them to the relevant retail destination on a
minimum-stop basis.
20 OPERATIONAL REVIEW