Marks and Spencer 2010 Annual Report Download - page 19

Overview p01 
Performance & KPIs p14 
Brand & marketplace 
Operating & financial review p26 
Governance p50 
Financial statements p78 
To find out more, visit marksandspencer.com/annualreport2010 15
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TRUST
Above: Share your views To
provide a more interactive experience
we increased the prominence of
customer product reviews on our
website. Customers have responded
well to the peer-to-peer feedback
and conversion rates have increased
as a result.
FUTURE TRENDS
As we move into 2010/11, macro-economic
conditions will continue to influence
consumer behaviour. However, our
current research suggests the following
trends are likely:
The pace of mobile technology and growing
acceptance of its ‘intrusion’ into everyday
lives, means consumers will expect brands
to be ready to interact when they want,
requiring brands to be ‘on’ 24/7.
Retailers that allow consumers to have input
into product development will be well placed
in the future. Increasingly consumers want to
personalise purchases, through colour, style
and functionality, as well as providing
feedback to both retailers and peers about
how they believe products and services
could be enhanced.
Changes to family dynamics mean UK
consumers are looking for alternative
communities, either ‘real’ or ‘virtual’ to achieve
a sense of belonging. In the retail space,
this may lead to more brands setting
up community pages or forums.
FOOD MARKET TRENDS
Over the year price inflation has worked its
way out of the market to the point of deflation,
with falling food prices masking the fact UK
customers were buying more.
Deals continued to be a key driver, with 30%
of the market sold on promotion. However,
copycat deals across the market meant
consumers responded well where quality
and innovation were the point of difference,
as they looked for deals that offered
something new and/or special.
As confidence improved consumers started
to trade up to an alternative supermarket or
switched to better, premium ranges within
their supermarket of choice.
Consumers also began to treat themselves
again, resulting in growth in confectionery
and bakery markets. They also adopted a
sense of nostalgia, creating a revival in retro
products with a modern update.
ONLINE MARKET TRENDS
Online market growth remains strong at
around 20%, but the rate of growth has
begun to stabilise as the market matures.
Consumers now expect a more engaging
experience from online shopping, as retailers
add more editorial, interactive content
to sites.
Developing technologies have meant
consumers expect greater flexibility and
tailored choices in both purchase and
delivery options.
The strongest opportunity for growth lies
with retailers that can integrate an online
offer with other shopping channels, such
as stores and call centres, to provide a
multi-channel service. Average customer rating
★ ★ ★ ★ ★
M&S FOOD RESPONSE
In 2008/09 a demand for value saw many
food retailers attempt to reposition themselves
as low cost providers. However, we invested
in margins to provide customers with better
value, without compromising quality. This has
served us well as customers began to trade
up. Quality remains the point of difference
between our ‘Dine In’ promotion and market
imitations. To keep the promotion fresh we
regularly include our newest products, mainly
from our Cook! range. See page 24 for
more detail.
M&S ONLINE RESPONSE
M&S is committed to becoming a multi-channel
retailer, integrating its online business with
other shopping channels. We launched
‘Shop Your Way’, explained fully on page 28,
to offer customers more flexible purchasing
and delivery options. We have also appointed
a Director of Multi-channel Development to
help us exploit the opportunity in this area.