Stuart Rose’s appointment as CEO of Marks & Spencer has raised the question again of what M&S needs to do to revive its fortunes. With Phillip Green snapping at its heels and shareholders impatient for the long-promised returns, what should Mr Rose do? This is what I, Mark Dorgan, would tell him:
Dear Mr Rose,
If you go out onto the high street and into the coffee bars of Britain you will see that your consumers have changed quite dramatically over the last ten years. They are a cosmopolitan and individualistic collection of people. They differentiate to a remarkable level of detail how they will meet their various wants and needs. They are experts at identifying where the right value-for-money proposition is on the high street.
Gone are the days when the consumer aspired only to afford the superior quality of M&S’s foods. Gone are the days when every woman wore only M&S underwear under their similar outfits. Today the underwear is as likely to be La Senza or Janet Reger, Anne Summers or Victoria’s Secret, Next or an M&S basic, or even a £4 garment from Tesco or ASDA.
More importantly, it is likely to be all of these at different times, because the consumer now buys an eclectic range of products in every category, at various prices, to meet different needs for quality and price at different times. Today’s most successful retailers have quite accurately identified the broad range of consumer needs as needs for ‘good, better and best’.
If you want to get back to satisfying your consumers so that they keep coming back for more, you need to implement your own version of ‘good, better and best’ under a revitalised brand that resonates with the consumer. This will mean consciously differentiating your food and clothing ranges into a basic but cheap option (good), a better quality and slightly more expensive range (better) and a premium range for those special purchases where the consumer doesn’t mind spending a bit more (best). In this way you will begin to make M&S the symbol of reliable value for money once again, satisfying the full range of today’s consumer needs.
But there is more. Single brand buying is no longer enough. Consumers don’t want to be as brand loyal any more. They want to be able to choose a Per Una outfit, but they also want the choice of a Ralph Lauren or this month’s trendy label. M&S will have to do more than create its own sub-brands. It will have to consider offering concessions to the best of the branded labels. I know this is sacrilege in M&S, but now is the time to be bold.
This will change the economic model of M&S and will also require a mind-set shift in your staff. But think of it as creating a whole store portfolio with the very best of M&S and other leading stores in one package. With Vittorio Radice, and his previous expertise from Selfridges, on board you have a great resource to do exactly that. Think of the impact this will have on the consumer.
The time has passed when a retailer could be just one thing to all consumers. Today you must be many things to all consumers. Sourcing is important. Ranging is important. Efficient store operations are important. But none of these are worth much if you aren’t satisfying the consumer’s needs.
Phillip Green may want to bid for M&S, but it would be a great shame if M&S became just another value high street brand in the BHS portfolio. It deserves more. You can make it much more, but only if you have the courage to boldly take the fight to the high street and win back the consumers.
Best of luck in your challenge,
Mark Dorgan
Member of PA's Management Group
