Marks and Spencer 2009 Annual Report Download - page 26

22 Marks and Spencer Group plc Annual report and financial statements 2009 Directors’ report
Overview
We believe in giving our customers what they want and that means
anticipating different trends as well as recognising and reacting
to broader external issues such as the economy. By doing this we keep half
a step ahead of our customers, any more and we will be too far ahead, any
less and we would be running to catch up. Striking this delicate balance is
considered so important at M&S that we set up a dedicated team of people
to do just that.
Since 1999 the Customer Insight Unit (CIU) has been tracking trends in
the marketplace. With the analysis it produces through research, market
data and by evaluating customer behaviour – it informs and influences
decisions within the business. For example through talking to our older
female customers the CIU was able to identify a gap in our current offer
and pin-point what we needed to do to fill it. By determining exactly what
this customer wanted – stylish, flattering and smart co-ordinates – the CIU
could then brief our womenswear team, who responded, and our new
‘Portfolio’ collection was born.
The following piece distils some of what the CIU has been telling us
about the marketplace. With the insight it provides, we can continue to
deliver everything that goes into creating Your M&S.
Clothing
The clothing market faced a difficult year. In this highly competitive
sector several factors are driving shopping trends on the High Street.
Older customers, who are more cautious about spending, are
increasingly buying on a ‘needs’ basis or replacing staples with investment
pieces. They are looking for clothing that lasts beyond the current season,
which can be dressed up or down and accessorised.
Additionally, the economic climate has forced customers to consider
carefully before buying, prompting retailers to introduce promotions and
discounts to entice them in, especially during Christmas. This resulted in
customers widening their store choice so they could cherry pick the best
offers, and use deals to ‘trade up’ to better quality items for less money.
Under-35 customers are more unpredictable in their approach to
spending. While spending initially slowed at the start of 2008/09, they
quickly returned to the impulse shopping that characterised their spending
before the credit crunch. They tend to buy for the moment and gravitate
to cheap fashion items – cutting back spending in other parts of their lives
so they can afford to shop.
Our marketplace
10
Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 Jun 04
-5
0
5
-10
-15
-20
-25
-30
-35
-40
-45
Consumer confidence index
Source: Gfk Consumer Confidence March 2009
MARKET FOCUS: M&S RESPONSE
Above: Something for everyone – from 5
pairs of socks for £3.50 to a £499 luxury wool
suit. We have listened to our customers’
concerns about budgets and have re-evaluated
our value ranges and introduced clear pricing
points to direct customers to the price bracket
that best suits them. When appropriate we
have introduced promotions on some lines –
such as a free shirt and tie with a suit – and
discounted others. All without compromising
on the high quality and stylish ranges that are
synonymous with our brand.
MARKET FOCUS: M&S RESPONSE
Above: Portfolio – fronted by Marie Helvin –
is designed for our core customer.
Right: Consumer confidence The consumer
confidence index is at its lowest level since
records began.