Our marketplace
Overview
Consumer confidence index
Source: Gfk Consumer Confidence March 2009
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.
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.
The general slowdown in the housing market and a freeze in mortgage
lending have prevented people from moving, encouraging them to make
the most of their current homes. This has led to many High Street closures
which further impacted on consumer confidence.
So while spending on ‘big ticket items’ such as furniture and white
goods has fallen, there has been a marked rise in home improvements
goods to spruce up the home. Entertainment goods such as televisions,
laptops and video gaming consoles sold well in 2008/09, reinforcing the
trend to stay in – although in the early months of 2009/10 many retailers
have reported a softening of sales in this category.
Customers are experimenting with food shopping both in terms of the
supermarkets where they shop and the type of food that is bought.
They are relying on supermarkets to guide them to smart choices and to
clearly offer unbeatable value. This desire for low cost food has spurred many
supermarkets to reposition themselves as ‘discount’ providers – seducing
customers with one-off offers or multi-buys.
- Key trends include:
- Customers trading down either to a different supermarket, or switching
to own label or value ranges within their favoured supermarket.
- Rising raw material costs are filtering through to the supermarkets with price
inflation now being passed on to customers. Customers are attempting to
off-set this through clever shopping, by making use of deals.
- Customers are treating themselves less. When they do, they are seeking
out comfort food, or they are indulging in restaurant quality ready meals.
- Cooking from scratch has become increasingly popular as a way to enjoy
great food at home and to budget more effectively.
Although online continues to be a key growth area for retailers, conversion
rates slowed during the year, with customers increasingly using websites to
browse and look for a bargain. To convert these browsers to buyers, online
retailers offered free delivery and online deals. Websites continued to evolve,
to satisfy customer demands for a more personal and engaging experience.
Established players are being challenged by specialist players such as
ASOS and Net-a-Porter that sell well-known brands.
125 YEARS OF INNOVATION
1953 We launched the first
ever high street petite range –
'For the Shorter Woman' –
in 1953 following research
which showed that the
majority of women were
shorter than the accepted
average of 5'5''.
1970s The fashion for micro mini-skirts
led to adults buying children's skirts
to achieve the right length.
Within a week a number
of M&S stores sold out
of a season's worth of a
children's kilts – most of
which were purchased
by women.
MARKET FOCUS: M&S RESPONSE
Portfolio – fronted by Marie Helvin –
is designed for our core customer.
MARKET FOCUS: M&S RESPONSE
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
Our Improve Don’t Move campaign
was a direct response to the housing market
slowdown, and provided a strong uplift to core
home goods sales.
Our Wise Buys label is now on more
than 500 products, from ready meals to fresh
fruit and veg, so our customers can economise
– not compromise.