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M&S on the ropes as youth market follows celebrity shoppers online M&S on the ropes as youth market follows celebrity shoppers online
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It may boast a presence in the knicker drawer of almost every woman in the country, but it would seem the great British public think that Marks & Spencer is, well … pants.It may boast a presence in the knicker drawer of almost every woman in the country, but it would seem the great British public think that Marks & Spencer is, well … pants.
Despite high-profile advertising campaigns featuring sophisticated supermodel Rosie Huntington-Whiteley and a frolicking Twiggy, Myleene Klass and Dannii Minogue, we still can't be persuaded to buy its clothes.Despite high-profile advertising campaigns featuring sophisticated supermodel Rosie Huntington-Whiteley and a frolicking Twiggy, Myleene Klass and Dannii Minogue, we still can't be persuaded to buy its clothes.
Last week, the company announced its worst first-quarter results in three years as the chief executive, Marc Bolland, confessed that general merchandise sales – 90% of which is clothing – are down 6.8%. Excuses were aplenty, with weakening market conditions and unseasonal weather proffered as reasons for poor performance, but the truth is a tougher pill for the executive board to swallow: M&S, the stalwart of the British high street, is floundering inelegantly at the deep end of the fashion pool, while being left behind by its competitors.Last week, the company announced its worst first-quarter results in three years as the chief executive, Marc Bolland, confessed that general merchandise sales – 90% of which is clothing – are down 6.8%. Excuses were aplenty, with weakening market conditions and unseasonal weather proffered as reasons for poor performance, but the truth is a tougher pill for the executive board to swallow: M&S, the stalwart of the British high street, is floundering inelegantly at the deep end of the fashion pool, while being left behind by its competitors.
Just last month, Next overtook the veteran trader as the most valuable retailer on the London Stock Exchange. And, on the same day M&S delivered its dire statement, the 12-year-old upstart Asos announced total sales growth of a staggering 49% (7% in the UK and 103% internationally).Just last month, Next overtook the veteran trader as the most valuable retailer on the London Stock Exchange. And, on the same day M&S delivered its dire statement, the 12-year-old upstart Asos announced total sales growth of a staggering 49% (7% in the UK and 103% internationally).
So why is it that even in these straitened times people are spending what little disposable income they have with a relative newcomer, whose business is wholly virtual, while good old Marks – part of the fabric of British society with more than 700 stores across the nation – is struggling to woo customers?So why is it that even in these straitened times people are spending what little disposable income they have with a relative newcomer, whose business is wholly virtual, while good old Marks – part of the fabric of British society with more than 700 stores across the nation – is struggling to woo customers?
"Asos live and breathe their target customer," said Caroline Nodder, editor in chief of fashion industry trade bible Drapers. "The people that work for them are the very same people they are selling to, and they know their needs and desires inside out. In contrast, M&S are trying to be all things to all people with all those sub-brands: they've alienated their core customer and have failed to attract new ones. Amazing customer service used to be the hallmark at M&S, but Asos have come along and set the benchmark for a whole new kind of positive customer relationship.""Asos live and breathe their target customer," said Caroline Nodder, editor in chief of fashion industry trade bible Drapers. "The people that work for them are the very same people they are selling to, and they know their needs and desires inside out. In contrast, M&S are trying to be all things to all people with all those sub-brands: they've alienated their core customer and have failed to attract new ones. Amazing customer service used to be the hallmark at M&S, but Asos have come along and set the benchmark for a whole new kind of positive customer relationship."
Nick Robertson, the founder and CEO of Asos, is the man who had the vision to create that online shopping experience. Originally launched in 2000 as an acronym of "as seen on screen", the fledgling website delivered film and TV-influenced fashion to the celebrity-obsessed youth market. Today, his site is the online destination for style-conscious twentysomethings – and often their mums, work colleagues and younger siblings. Even some of the stars whose outfits inspired the site wear Asos clothes.Nick Robertson, the founder and CEO of Asos, is the man who had the vision to create that online shopping experience. Originally launched in 2000 as an acronym of "as seen on screen", the fledgling website delivered film and TV-influenced fashion to the celebrity-obsessed youth market. Today, his site is the online destination for style-conscious twentysomethings – and often their mums, work colleagues and younger siblings. Even some of the stars whose outfits inspired the site wear Asos clothes.
With more than 65,000 products listed for sale at any given time, the range changes rapidly in response to customer demand, with an appetite-whetting mix of affordable own-label merchandise sitting alongside familiar high street brands such as River Island and Whistles, as well as aspirational pieces from designers including Stella McCartney, Paul Smith and Vivienne Westwood.With more than 65,000 products listed for sale at any given time, the range changes rapidly in response to customer demand, with an appetite-whetting mix of affordable own-label merchandise sitting alongside familiar high street brands such as River Island and Whistles, as well as aspirational pieces from designers including Stella McCartney, Paul Smith and Vivienne Westwood.
Robertson's business model has also continually adapted to deliver innovations such as Asos Marketplace, a forum where customers can sell their own clothes through the website.Robertson's business model has also continually adapted to deliver innovations such as Asos Marketplace, a forum where customers can sell their own clothes through the website.
"Shopping has evolved over hundreds of years, from marketplacesin market towns, through to small shop fronts, then on to department stores, which were essentially bigger, more organised marketplaces," said Robertson from his London HQ last week. "The internet has rewritten the rules again, but essentially it has always been as much about service as product. At Asos, I deliver the two in equal measure: the proposition and the service. Service isn't lower down the board, because it's fundamental to customer loyalty: it needs to be simple, seamless and quick for consumers to get the best possible experience, so right from the start I wanted free delivery and easy returns.""Shopping has evolved over hundreds of years, from marketplacesin market towns, through to small shop fronts, then on to department stores, which were essentially bigger, more organised marketplaces," said Robertson from his London HQ last week. "The internet has rewritten the rules again, but essentially it has always been as much about service as product. At Asos, I deliver the two in equal measure: the proposition and the service. Service isn't lower down the board, because it's fundamental to customer loyalty: it needs to be simple, seamless and quick for consumers to get the best possible experience, so right from the start I wanted free delivery and easy returns."
These are the guiding principles of a successful online venture: when you are shipping 40,000 parcels a day to customers who want instant gratification, you have to meet those demands, or hopefully exceed them.These are the guiding principles of a successful online venture: when you are shipping 40,000 parcels a day to customers who want instant gratification, you have to meet those demands, or hopefully exceed them.
"We take an average twentysomething and look at her wardrobe, which is a mix of high street brands, a bit of vintage and something she's saved up for from a designer label," said Robertson. "We then sell that back to her, in all its forms. Why wasn't I afraid to sell other brands and let our customers sell their own cast-offs through our site? Because she's going to do it anyway, and I'd rather keep her on board with us, than have her click off on to another competing site.""We take an average twentysomething and look at her wardrobe, which is a mix of high street brands, a bit of vintage and something she's saved up for from a designer label," said Robertson. "We then sell that back to her, in all its forms. Why wasn't I afraid to sell other brands and let our customers sell their own cast-offs through our site? Because she's going to do it anyway, and I'd rather keep her on board with us, than have her click off on to another competing site."
Anouszka Budny, a glamorous, style-conscious 20-year-old history undergraduate at Exeter University, is typical of the Asos customer and said it is "the go-to site whenever I want something new for my wardrobe. All my friends buy their clothes there: you can order a new outfit from the sofa the day before a night out, an interview or a wedding and they always deliver.Anouszka Budny, a glamorous, style-conscious 20-year-old history undergraduate at Exeter University, is typical of the Asos customer and said it is "the go-to site whenever I want something new for my wardrobe. All my friends buy their clothes there: you can order a new outfit from the sofa the day before a night out, an interview or a wedding and they always deliver.
"It doesn't matter what I want, I always find things I like there, and the free delivery and ease of return is definitely an incentive to buy and try. My mum, who is 52, and my 18-year-old brother are also big fans, so they are reaching out to a wider audience than you think.""It doesn't matter what I want, I always find things I like there, and the free delivery and ease of return is definitely an incentive to buy and try. My mum, who is 52, and my 18-year-old brother are also big fans, so they are reaching out to a wider audience than you think."
Of course, Asos and M&S aren't directly competing in the same demographic market, and there is a plethora of other stores – online and in the high street – competing for customers' hard-earned cash. Even Amazon is eating its way into the lucrative clothing market, and stores such as Oasis, Warehouse and Whistles all offer same-day delivery (in certain postcodes) on their websites. Zara, Mango, J Crew and Banana Republic are all examples of the globalisation of fashion, an increasingly competitive arena.Of course, Asos and M&S aren't directly competing in the same demographic market, and there is a plethora of other stores – online and in the high street – competing for customers' hard-earned cash. Even Amazon is eating its way into the lucrative clothing market, and stores such as Oasis, Warehouse and Whistles all offer same-day delivery (in certain postcodes) on their websites. Zara, Mango, J Crew and Banana Republic are all examples of the globalisation of fashion, an increasingly competitive arena.
Philip Green's Topshop has capitalised on phenomenal success at the turn of the millennium with a brilliant online offering that ensures those who have access only to small regional stores can enjoy the comprehensive collection featured in the world-renowned Oxford Circus flagship – and he's just announced a distribution deal with the US department store Nordstrom.Philip Green's Topshop has capitalised on phenomenal success at the turn of the millennium with a brilliant online offering that ensures those who have access only to small regional stores can enjoy the comprehensive collection featured in the world-renowned Oxford Circus flagship – and he's just announced a distribution deal with the US department store Nordstrom.
But Asos and M&S are extreme case studies demonstrating the inspiring success story and the tired underachiever of modern retailing. Many believe that for too long M&S has assumed it has a special place in the hearts and wardrobes of British women, but has failed to evolve with the needs and tastes of those people.But Asos and M&S are extreme case studies demonstrating the inspiring success story and the tired underachiever of modern retailing. Many believe that for too long M&S has assumed it has a special place in the hearts and wardrobes of British women, but has failed to evolve with the needs and tastes of those people.
The retail guru Mary Portas is vociferous in her thoughts on the matter: "Asos is simply brilliant. They know their customer and they focus on what she wants. Marks have failed to keep up. A little tweak at board level [M&S's head of general merchandise, Kate Bostock, left "by mutual consent" following the trading announcement last week] with short-term plans to appease shareholders isn't enough here: they need to completely redefine how they do business.The retail guru Mary Portas is vociferous in her thoughts on the matter: "Asos is simply brilliant. They know their customer and they focus on what she wants. Marks have failed to keep up. A little tweak at board level [M&S's head of general merchandise, Kate Bostock, left "by mutual consent" following the trading announcement last week] with short-term plans to appease shareholders isn't enough here: they need to completely redefine how they do business.
"They need to go really deep into the brand and strategically plan where they want to be in 10 years, and stop limping along, lurching from one disaster to another. They need someone to come along and do what Mickey Drexler did with J Crew in the USA, changing the entire proposition and perception of the brand, making the whole associated experience a positive one. I feel like Marks's stores haven't changed a bit in the last 10 years: they look out of date.""They need to go really deep into the brand and strategically plan where they want to be in 10 years, and stop limping along, lurching from one disaster to another. They need someone to come along and do what Mickey Drexler did with J Crew in the USA, changing the entire proposition and perception of the brand, making the whole associated experience a positive one. I feel like Marks's stores haven't changed a bit in the last 10 years: they look out of date."
She added: "The retail environment at Marks & Spencer simply isn't inviting or exciting any more. It doesn't appeal to anyone. The whole world was once at their feet, and they simply let it walk on by because they didn't make the effort to move on with their customer. Even if they are the only fashion retailer in a town, they can't assume that women will shop there any more, because those women know they can buy online.She added: "The retail environment at Marks & Spencer simply isn't inviting or exciting any more. It doesn't appeal to anyone. The whole world was once at their feet, and they simply let it walk on by because they didn't make the effort to move on with their customer. Even if they are the only fashion retailer in a town, they can't assume that women will shop there any more, because those women know they can buy online.
"Just having that many doors on the high street doesn't give them a captive audience and they have to stop the rot. I've seen what the closure of Woolworths did to the British high street, and M&S would be an absolute disaster. It's not too late to do something, but it needs to be drastic.""Just having that many doors on the high street doesn't give them a captive audience and they have to stop the rot. I've seen what the closure of Woolworths did to the British high street, and M&S would be an absolute disaster. It's not too late to do something, but it needs to be drastic."
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