The Foundation

Marks & Spencer

Why M&S deserved to stay on the High Street – giving direction to a £1.5bn store refurbishment programme

 Situation

In 2002, the M&S CEO Roger Holmes asked a team to tell him why M&S should exist in ten years time. He knew the recovery (current at the time) had shallow roots, and that the M&S stores needed investment having been neglected for over a decade. But they needed more than paint – they needed to be built around a more attractive expression of the M&S offer.

The internal team made good progress getting inputs from a wide range of sources covering many aspects of the future for customers and business. But they wanted help to identify what mattered most, and in working out how M&S should respond. They also needed to engage the managers across the business in such a huge investment.

Insight

M&S should return to its roots, and update the values it has always stood for so they are attractive to customers in the future. The key was the idea that they ‘make aspirational quality accessible to all’. We realised they had lost touch with how customers define quality and with ways of making things accessible in the modern age.

Solution

We identified the core customer mindset as mature – grown up and experienced, with money. So not at the fashion end of the market.

We defined what quality would mean to such people – style, the way they spend their time, provenance. And accessibility meant going to them in many ways – smaller stores, where quality was needed (e.g. service stations), larger stores where people drive out of town, and on-line. From this definition, the architects and the M&S team designed the store blueprints and pilot stores.

We then framed to pilot store assessments so they asked the right question. They went from ‘the numbers are not high enough and there are lots of things wrong’ to ‘we believe in the direction, and if we put the things right, the numbers will rise’. This was an innovative mind-set and not easy in the traditional M&S culture

Result

In Autumn 2005, following “encouraging” sales uplifts versus control stores stocking similar products, described by Investec analyst Matthew McEachran as being up to 25%, Stuart Rose announced the full roll-out of the new formats in a three year £1.5bn programme.

This formed one part of Stuart Rose’s three areas of focus – product, service and environment, and contributed to M&S’s return to competitiveness through 2007, when profits before tax hit £965m, and beyond. Good stores can’t help sell bad product, but they can certainly stop good product being appreciated and make good service hard to deliver.