Marks and Spencer 2015 Annual Report Download - page 30

28
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT
2. 3. 1.
CHANNELS
PERFORMANCE OVERVIEW
To ensure that we have one view of the M&S
customer, we brought our UK Retail and
M&S.com channels together under single
management this year. The change refl ects
our need to deliver a consistent and
convenient experience for our customers
however they shop with us, whether it’s on a
computer, a tablet, a mobile phone or in one
of our 852 UK stores. It has been a pivotal
year in terms of our infrastructure. Whilst we
faced some di culties during the bedding in
period, our investment in M&S.com and our
distribution centre at Castle Donington are
the right thing for our business in the long
term. We are now fi t for the future and in
control of our multi-channel ambitions.
STORES
We focused our space growth on the Simply
Food format, opening 62 new stores, which
increased customer access – an additional
1.2 million people are now within ten minutes
drive of a Simply Food. Although our strategy
is to add no net new GM space to our store
estate af ter 2015/16 , we continue to review our
portfolio to ensure that our stores are in the
most convenient locations. We opened two
fu ll line stores at Monks Cross in York and
Wolstanton near Stoke-on-Trent.
Within our stores we concentrated on
creating an environment that projects our
products’ style and innovation credentials.
Guidance was a central theme. Using the
M&S Way principles, we merchandised our
collections in more cohesive and colour
coordinated ways to show customers how
they might wear the latest styles. We
upgraded the environment in many of our
stores, including new Menswear departments
in our top 70 stores, with elements of the
new scheme rolled out to a further 48, and
refreshed Womenswear departments in
44stores. Stronger v isual merchandising in
Food helped customers to discover new
fl avours. We have started the roll out of our
new Food Hall concept, which adds theatre
and adventure to the shopping trip.
Knowledgeable employees are our bedrock,
and this year our training initiatives continued
to ensure that customers had an easy and
enjoyable shopping experience. Our
colleagues know that our unyielding focus on
Presentation, Availability, Cross-selling and
service, and Knowledge – our PACK priorities –
is what separates us from the competition.
M&S.COM
Following our move from the Amazon web
platform, this was the fi rst full year in which we
had control of our website. Whilst it proved to
be technically resilient, the new site presented
a bigger change for our customers than we
anticipated and sales were a ected. We
worked hard to address this and made a
number of updates to improve the shopping
experience. Our customers liked the
enhanced functionality and cleaner look of
the site, which we continually fi ne-tune to
make as intuitive as possible. M&S.com sales
returned to growth in the fourth quarter and
we saw gradual improvement across all key
metrics: over the year tra c grew by 10.9%,
customer satisfaction rose by 18% and
conversion rates improved as customers got
more familiar with the new site layout. Some
7 million shoppers have now registered on
the site, surpassing the number on our former
Amazon-run site. Customers enjoy the site’s
strong editorial point of view – we know they
are more likely to buy if they see supportive
editorial alongside a garment they like. On
average, conversion was 20% higher on
produc ts that were featured as Editor’s Picks.
R Our performance was impacted by
operational challenges at our Castle
Donington distribution centre over the peak
Christmas period. Highly automated sites like
this often need refi nement during their fi rst
period of sustained demand and we have
made progress in addressing the issues. We
have learned from this, made improvements
to our systems, and strengthened our
management team who continue to closely
monitor its performance. We are confi dent in
our long-term ability to serve our customers
better. Customers saw improvements in our
delivery proposition as the year progressed,
with the introduction of a 10pm cut-o for
paid next day home delivery and a 5pm
cut-o for free next day store collection.
Since it opened, Castle Donington has
handled over 85 million products.
Our website and distribution centre are
powerful engines for growth. Following
our investment in them, we now have a big
opportunity to drive online sales growth,
increase our online profi tability and set
M&S up for years to come.
We aim to deliver a consistent, convenient
and inspirational experience for our customers
whichever way they choose to shop with us.
LAURA WADE-GERY EXECUTIVE DIRECTOR, MULTI-CHANNEL
1
1. T he nu mber of vi si ts to our
website via mobile phones
rose from 7 million in 2012,
to 80 mi lli on i n 2015.
2. A We installed the UK’s
largest single roof-mounted
solar panel array on our
distr ibutio n centre – it wil l
generate over 5,000 MWh
of electricity per year,
equivalent to the energy
needed to power 1,190
houses.
3. A Our Newcastle store was
our fi rst full line store to be
given a full PlanA eco refi t,
and features a 167sqmetre
green wall irrigated with
rainwater.
852
TOTAL UK
STORES
302
FULL LINE
STORES
198
M&S SIMPLY FOOD
OWNED
306
M&S SIMPLY FOOD
FRANCHISE
OPERATING PERFORMANCE
46
OUTLET STORES