Marks&Spencer business report

FASHION INDUSTRY: ASSIGNMENT 1
BUSINESS REPORT

Manchester Metropolitan University
Hollings Faculty
Department of Apparel
International Fashion Promotion
Fashion Industry
Assignment 1: Business Report
13138366
Year 1 Level 4

Introduction.......................................................................................................1
Background to the Retailer ................................................................................2
Current Trading..................................................................................................2
Retail Strategies.................................................................................................3
Market Levels ....................................................................................................3
Market and Retail Analysis.................................................................................4
Sourcing and CSR Strategies...............................................................................5
Future Strategies ...............................................................................................5
Store Appraisal ..................................................................................................6
Conclusion .........................................................................................................7
References.........................................................................................................8
Table of Figures..................................................................................................9
Appendices ......................................................................................................10
Contents

M&S:
Quality, Value,
Service, Innovation,
Trust
Mark & Spencer
A huge and influential company that keeps changing and developing since
1884.
Words by Asia Gentili
INTRODUCTION. The aim of this report is to
analyse how the well-known British company
Mark&Spencer works and engages with
customers in an always-innovative way, from
the supply chain to the in-store experience. This
report will go through the introduction of new
technologies in communication channels and
products development, keeping an eye on the
engagement with social and environmental
issues. Particular attention will be paid to
financial strategies and market position to
match up to the competitors within the retail
industry.
Marks&Spencer (2013)
1

Tesco
Asda
M&S
Next
Sainsbury’s
Morrisons
Waitrose
John Lewis
Debenhams
Primark
Earnings
Products
Offer
Fig.1
Marks&Spencer Archive (1910)
Marks&Spencer Archive (1910)
BACKGROUND TO THE RETAILER. The first
bazaar was opened in Leeds in 1884 by
Michael Marks. The Slogan was “Don’t ask the
price, it’s a penny”. In 1894 the partnership
with Thomas Spencer started to give the
company its shape, based on 5 key principles:
QUALITY, VALUE, SERVICE, INNOVATION,
TRUST. The years under the First World War
were difficult for everybody, but M&S was
able to cope with the difficulties and to adapt
its market to the demanding needs. In the
1920s the company adopted the revolutionary
policy of buying directly from suppliers, which
is still part of Marks&Spencer sourcing
strategy. As years passed, M&S followed the
innovative trends in fashion as well as in other
sectors, like beauty or food. The diffusion of
freezers and microwaves brought to the
introduction of frozen ready-meals, still
popular, like pizzas or lasagnes. Sir Richard
Greenbury ruled M&S through the 1990s,
and in 1998 it became the first British
retailer to make pre-tax profits of over £1
billion. To keep distinguishing from the
competitors, the improvement of new
quality product and new apparel lines
to attract customers is Marks&Spencer
main concern.
CURRENT TRADING. Marks&Spencer
is a variety store that offers a wide range of
products within four main sectors: Home,
Food, General Merchandise and Clothing, with
the majority being own-brand collections
(KeyNote, 2013:32). As shown in appendix 1
the Group Revenue for the taxation year
2012/13 has been of 10,026.8 £m for the
whole company, whereof 8,951.4 only in UK.
The UK turnover is split between Food (54%)
and General Merchandise (46%) whose profit
has not been satisfactory this year, with a
downturn of 2.4%. In spite of the alarming
sales decrease in the Clothing sector,
experienced during the last few years, M&S
remains the UK first clothing retailer but it “needs
to address fashionability in the short term”
(Mintel, 2013) not to lose its leadership. We
can identify the following companies as M&S
direct competitors: Tesco, ASDA, Next,
Sainsbury’s, Waitrose, John Lewis, Primark,
Debenhams and Morrisons. As the Interbrand
Best Retail Brands 2013 Report illustrates
(Fig.1), M&S is still relevant within the retail
industry comparing products offer and
earnings per year.
2

1. Marks&Spencer
2. John Lewis
3. Next
4. Taveda Investments
5. Debenhams
6. Primark
7. Burberry
8. New Look
9. TJX UK
10.Matalan
Fig. 2
Marks&Spencer
(2013)
RETAIL STRATEGIES.
Marks&Spencer is
completely aware of
the multi-channel com-
munication’s crucial
importance as the most
effective way to reach
customers. Apart from
the more common E-Commerce, M&S offers
two modern shopping channels: M-Commerce
ad S-Commerce. While several competitors
count on an effective E-commerce strategy,
the majority of Marks&Spencer customers do
not shop online, probably due to its middle-
aged target market with a more traditional
approach to shopping.
M-Commerce refers to iPad and tablets
technology, used in the company stores to
buy or check the products available in stock,
to receive advice about interior design choices
simply sending pictures of the space to
furnish. In Beauty departments, virtual
makeover counters allow customers to upload
their own pictures and try make-up products
on before making the purchase.
S-Commerce includes all the promotional
techniques related to social media and their
influence. On Facebook, M&S UK official page
has 1.5 million likes and provides a continue
update of offers, discounts, new products in
and new initiatives. Specific pages for the
most important stores (e.g Marble Arch or
Covent Garden in London) are available with
pictures and reviews, as well
as a link to the main website.
However, there is no specific
information about opening
and closing times, offers or
new products in those
particular stores, which could
increase the turnout. Official
pages are also available for
several foreign countries such
as Ireland, Turkey, Greece or
France. M&S is also present
on Twitter, Pinterest,
YouTube, Tumblr, Google+ and LinkedIn.
Recently the M&S app has been launched for
Apple and Android and has immediately
reached the top position in iTunes Free UK
Lifestyle Apps with 580,000 downloads.
(Marks&Spencer, 2013).
The Youtube channel is directly linked to M&S
TV, a channel that provide a sort of
“backstage” of the company projects and
initiatives, such as Plan A (see SOURCING &
CSR section) or innovations in product or food
development. However, the person
concerned of all these facilities is the
customer and Marks&Spencer must take in
account average age (40-60) and possible
poor technological inclination, providing a
strong support by the members of the staff,
particularly in store.
MARKET LEVELS. As
a variety store,
Marks&Spencer fits
in different sectors
of the market. Both
its Food department
and the General
Merchandise one
are characterised by
high quality and
innovation, with
continuous attention
dedicated to product
development, new
technologies and
materials. As its slogan claims, it is based on
“QUALITY, VALUE, SERVICE, INNOVATION,
TRUST” and it has built a loyal customer base
throughout the years.
According to Hughes (2013)
M&S is the first UK retailer in
2013 for sales (Fig. 2), with a
group revenue of over £10
billion of which £4.1 only from
General Merchandise (including
Clothing). As shown in Fig.4,
Womenswear sector is mainly
supported by the Lingerie
Department (26.8%), while
sales in other sectors continue
to fall with little evidence of
improvement (The Guardian,
2013). As the Market Report 2013 shows,
blouses were the most purchased in 2012 and
a current trend for M&S, to follow lingerie, in
particular sports bras, up 19% and dressing
gowns, up 12%. Trousers and chinos are
preferred to skirts, then jumpers,
3

Marks&Spencer
Statistics 2013
Womenswear
Menswear
Kidswear
Lingerie
General Statistics 2012
Womenswear
Menswear
Kidswear
Other
Fig.3
cardigans and dresses. In Menswears as well
as in Womenswear, trends are formalwear
orientated with a good response from
heritage departments such as Coats,
Outerwear and formal Jackets.
As for 2012 general trends, socks and
underwear are on the highest-ranking in
Marks&Spencer Menswear sales, up 3%.
Kidswear sales decreased in the last few
years, as clothes exchanges websites (e.g
Circle of moms, Moms Exchange, Mom365)
were created to give families the opportunity
to swap their clothes rather than buy new
ones. However, Marks&Spencer has
experienced its best ever year in Schoolwear
and Occasionwear sales, in particular “boy
and girl” bridesmaids dresses.
(Marks&Spencer Annual Report, 2013)
MARKET AND RETAILER ANALYSIS. There are
several driving market that can have an
impact on the industry. They are usually
structured in the so called PEST (political or
legal, economic, socio-cultural and
demographic and technological) model, to
help retailers to analyse the “macro-
environment”.
Political and Legal: Marks&Spencer has
proved and tested all its toys following the
Toy Safety Directive, published on 30 June
2009 (European Commission, 2009). In the
label, the suitable age to use that particular
toy is specified to help customers in the
purchase. In legal matters, Marks&Spencer
owns all the rights of its brand (“Terms and
Conditions”, appendix 2) and it is registered
data user under the Data Protection Act
(1998).
Economic: Even if retailers have started to
recover and the situation is becoming more
stable, recession has influenced the industry
in the last few years. According to Mintel
(2010) the downturn has been a benefit for
value retailers, while midmarket retailers,
such as Marks&Spencer, has suffered more
and the improvement has been slower. As far
as unemployment is concerned, the company
has setup a program called “Mark&Start”,
intended to help young and hard-pressed
people finding a job in the company. In regard
to exchange rates, M&S has set the same
percentage for each currency and 0%
commission on foreign currency.
Socio-cultural and demographic: M&S is a
member of Ethical Trading Initiative (ETI) since
1999, to improve working conditions within its
supply chain. Apart from all the projects
included in the Plan A, M&S is committed to
preserve animal welfare in partnership with
WWF. About changes in customer sizes,
Marks&Spencer models represent a wider
range of sizes and their Plus Collection goes
from size 20 to 28. (more than Primark, whose
largest size is 20).
Technological: Marks & Spencer is trialing
RFID tags within the supply chain as the next
generation of barcode. RFID uses a microchip
combined with an antenna to transmit
product item numbers wireless (Burns, D. et
al., 2011). They are useful during the
transportation to check products without
unpacking boxes. (Grose, et al., 2012). As
discussed in the above paragraph, the huge
success of social media and multi-channel
communication has had a crucial impact on
M&S which is one of the most technological
retailer within the industry.
4

STRENGHTS
•High Quality Products
•Customer Loyalty
•Open minded
business approach
•Environment
Engagement
WEAKNESSES
•Weak fashion appeal
•Middle-aged Target
Market
•Ineffective
E-Commerce
OPPORTUNITIES
•Global Expansion
•Collaborations (e.g.
Vogue)
•Multi-channel
effective strategies
THREATS
•Fast-Fashion
Development
•Strong Online
Competition
The external factors are not the only criteria
to analyse in an honest company appraisal.
With a SWOT analysis (Strengths-Weaknesses-
Opportunities-Threats) it is possible to
understand what the company is doing and
what it should do to improve results and
performance.
SOURCING AND CSR STRATEGIES. In order to
provide products in a quicker and more cost-
effective way, M&S sourcing strategy is
“direct”. The company does not use agencies
or intermediaries to monitor its supply chain,
but it works closely with it. Strong
relationships between sourcing managers,
suppliers, buyers, merchandisers and
designers are crucial to reproduce
all the forecasted trends,
market analysis and style
requirements in the best
product for the
customer. Besides, M&S
follows a “direct buying”
process in which design
and buying teams are
appointed to work closely
with the suppliers in the
research and purchase of raw
materials. (Grose, V. 2012:62)
Corporate Social Responsibility (CSR)
represent the stated intentions and actions
undertaken by the company to behave
responsibly with its sourcing and supply chain.
In 2007, Marks&Spencer founded “Plan A”
setting out 100 commitments to achieve in 5
years and some of those objectives have been
reached successfully: the aim to become CO2
neutral became truth in 2012, when M&S
gained the status of CarbonNeutral®
company, also encouraging their suppliers to
reduce greenhouse gas emissions.
More than 45% of the whole merchandise is
composed by “Plan A products”, that is to say
organic or made from recycled materials,
purchased from fairtrades. Another project is
“Zero Waste to Landfill”, aimed to reduce
waste and promote recycle. In June 2012,
M&S launched a programme called “Farming
for the Future” to help talented young people
coming into UK agriculture in order to gain the
skills to be “agriculturalist”. Relevant
company’s collaborations with charity
associations such as UNICEF and Oxfam, with
on-going initiatives like the “M&S and Oxfam
Clothes Exchange”, which has raised over 3£
million for Oxfam, saving more than 5 million
items from going to landfill.
Furthermore, Marks&Spencer donates 50p
each 1£ saved from recycled coat hangers,
totalling £630,000 a year, donated to UNICEF.
FUTURE STRATEGIES. Looking into the future,
Marks&Spencer keeps thinking about
environment and sustainability. As Clem
Constantine, Director of Property & Store
Development at M&S, says (M&S TV, 2013:
min 0:10), it is all about “Doing the right
thing”. The objectives are: reducing
refrigeration by 80% by 2020 and
construction waste by 50%, asking
more commitment and awareness
of ethical issues and procedures
to the suppliers and opening new
“learning stores” (e.g Cheshire
Oaks, Fig.4). They consist in stores
Fig.4
5

These tables represent the
Natural Resources utilised and
the Percentage of Customer’s
engagement with the plan
(Plan A Annual Report, 2013)
Gentili, A. (2013)
Fig.5
6
where it is possible to test and prove new
technologies and solutions to save and
recycle, both in the UK and internationally. As
far as its global expansion strategies are
concerned, the company will continue to
reach new countries and focus on franchises,
still present in over 17 countries.
In order to keep up with the fast changing
technological world and its demanding
consumers, in Spring 2014 the company’s
brand new website will be launched, with
more style advice and a better organised
“Shop Your Way” option, with free next day
deliveries. Important collaborations with
popular fashion magazines and celebrities are
intended to regain competitiveness within the
fashion marketplace and for next Spring-
Summer collection, M&S is working with
Vogue on a capsule-collection of five easy-to-
wear pieces.
In 2014 the “Graduate Scheme and Business
Placement Programme” will offer to 200
graduates the opportunity to work with the
company in retail management roles or in
specialist schemes to join the business
permanently by April 2014. (Marks&Spencer,
2013).
STORE APPRAISAL. In order to make the in-
store experience more effective possible, for
both the customers and the
company, the art of visual
merchandising must be
taken in account. M&S store
format design is easy to
shop in, with specific areas
for any personality and style.
Furthermore, there are new
impact “Welcome Zones”
highlighting the latest trends
and original designs for
departments like “Coat
Shop”, “Dress Shop”, and
“Trend Zones” (Fig. 5) to
show outfits which can be
put together. Usually, M&S
stores are quite huge,
arranged on multiple floors
with clear direction infor-
mation and visual displays located at the front
of each department to find products in a
quicker way. The majority of M&S selling
points offer services such as cash machines or
cafés. Marks&Spencer pays particular
attention to the effectiveness of its Customer
Service, creating a relaxing environment:
customer service personnel is always ready to
help, with smiling approaches and useful
advice, even if the number of staff present
should be increased and balanced to satisfy
the incredible customer flow. As a trusted
company, Marks&Spencer
offer a high quality and
safe-proofed childrenswear
collections, with particular
interest in children (and
parents) tastes. During
Christmas time, new
collections come out to
make it even more funny
and joyful, like the brand
new collection of 25
Christmas jumpers for kids
from 3 months to 14 years
old, 10 for girls and 15 for
boys. This collection is
available online but not
necessarily in each store,
as well as the whole range
of sizes. Prices go from £5-
£10 to £50-£75, with an average price of £15-
£25. The main colours are grey, blue and red,
with funny typical Christmas-inspired

THIS ANALYSIS CAN BE
SUMMARIZED IN A FEW
KEY FUNDAMENTALS
ELEMENT OF
MARKS&SPENCER
BUSINESS
EXPANSION
toward different
countries but maintaining
its distinguished
quality.
MULTI-CHANNEL
experiencing new
multimedia platforms
and studying new trends
in customer behaviourQUALITY
with new materials,
certified sources and
new technologies
SUSTAINABILITY
with continuous
challenges and
particular care for
environmental
issues
pictures, like reindeers, Santa, snowflakes,
and so on. On average, there are more than
10 pieces available in stock for each size but
due to the chaotic Christmas shopping, most
sizes are sold out and the quantities available
go from four to eight pieces at most both in
store and online. Eight jumpers up to 25 are
hooded with button fastenings, while only six
are available in gift boxes, including little
extras like paper masks, hats or funny
accessories. These particular
jumpers are 100% cashmere, with
printings, such as foxes, raccoons,
deer or bears, with prices from
£50 to 75£. All the items have
regular length and fitting, long or
¾ length sleeve with crew, round
or funnel neck. The materials are
cotton, viscose, acrylic, polyester,
polyamide, cashmere and wool,
with ribbed trims and machine
washable.
They are all available online for
“free Next Day Store Collection”
or in alternative, they can be
bought with “Home Delivery” (see
appendix 3) both in UK and internationally
(see appendix 4).
CONCLUSION.
Gentili, A. (2013)
7

References
Davis Burns, L, K. Mullet, K., O. Bryant, N (2011). The Business of Fashion. 4th ed. New York: Fairchild
Books. 616.
Dillon, S. (2012). The Fundamentals of Fashion Management.1st
ed. Switzerland: AVA Book. 176
Grose, V. (2012). Concept to Customer. 1st
ed. Switzerland: AVA Book. 176
Hughes, K. (2013) Market Report 2013. 10th
ed. Key Note.
Interbrand (2013). Best Retail Brands 2013. Available from: BestRetailBrands.com
Mintel (2010) Fashion: Impact on the Recession. Online. 4th
December 2013. Available from:
http://academic.mintel.com.ezproxy.mmu.ac.uk/display/528295/
M&S TV (2013). Plan A Property. Online. 29 November 2013.
http://www.marksandspencer.com/MS-
TV/b/311612031?ie=UTF8&intid=gft_mstv&pf_rd_r=1MCZ7GK1QXANC8DM1F7C&pf_rd_m=A2BO0
OYVBKIQJM&pf_rd_t=101&pf_rd_i=42966030&pf_rd_p=469024773&pf_rd_s=footer-2
Marks&Spencer (2013) ‘MARKS & SPENCER OPENS SCHEMES FOR 200 GRADUATES AND
UNDERGRADUATES’. Online. 25 November 2013.
http://corporate.marksandspencer.com/media/press_releases/schemes_open_for_200_graduates_
and_undergraduates
Marks&Spencer (2013). Annual Report 2013. Available from:
http://annualreport.marksandspencer.com/
Marks&Spencer (2013). Plan A Report 2013. Available from:
http://annualreport.marksandspencer.com/downloads/
8

Table of Figures
Gentili, A. (2013) Christmas Jumpers. Marks&Spencer Trafford Centre. 3rd
December 2013.
Gentili, A. (2013) Trend Zone. Marks&Spencer Trafford Centre. 3rd
December 2013.
Marks&Spencer (2013) Autumn 2013 Collection. Online Image. Available from:
http://corporate.marksandspencer.com/media/media_library
Marks&Spencer (2013) Cheshire Oaks. Online Image. Available from:
Marks&Spencer (2013) Cotton Farmers. Online Image. Available from:
Marks&Spencer (2013) Fairtrade Cotton. Online Image. Available from:
Marks&Spencer (2013) Fairtrade Cotton. Online Image. Available from:
Marks&Spencer (2013) Kids SS2013. Online Image. Available from:
Marks&Spencer (2013) London Style Bus in Hamburg. Online Image. Available from:
Marks&Spencer (2013) M&S app. Online Image. Available from:
Marks&Spencer (2013) Plan A. Online Image. Available from:
Marks&Spencer (2013) Prawn Cocktail. Online Image. Available from:
Marks&Spencer (2013) Visual Makeover Counter. Online Image. Available from:
Marks&Spencer (2013). Plan A Annual Report. Online. Available from:
http://planareport.marksandspencer.com/
Marks&Spencer Archive (1910) Marks&Spencer Bazar. Online Image. Available from:
http://www.mandslibrary.co.uk/thumbnail.aspx?tab=4&nodeindex=5&sectionid=121&toplevel=450
Marks&Spencer Archive (1910) Marks&Spencer. Online Image. Available from:
http://www.mandslibrary.co.uk/thumbnail.aspx?tab=4&nodeindex=5&sectionid=121&toplevel=450
9

Appendices
Appendix 1
Appendix 2
General terms and conditions
This site is owned and operated by Marks and Spencer Group plc ('Marks & Spencer', 'we' or 'us').
Registered office: Waterside House, 35 North Wharf Rd, London W2 1NW. Registered number
4256886 (England and Wales).
Ownership of rights
All rights, including copyright, in this website are owned by or licensed to Marks & Spencer. Any use
of this website or its contents, including copying or storing it or them in whole or part, other than for
your own personal, non-commercial use is prohibited without the permission of Marks & Spencer.
You may not modify, distribute or re-post something on this website for any purpose.
Appendix 3
52 weeks ended
30 March 2013 £m 31 March 2012 £m % variance
Group revenue 10,026.8 9,934.3 +0.9
UK 8,951.4 8,868.2 +0.9
International 1,075.4 1,066.1 +0.9
INTERNATIONAL DELIVERY
We deliver clothing, homeware and beauty products internationally.
See below for exceptions*
We have dedicated international sites for customers in the Netherlands, Luxembourg,
France, Germany, Mainland Spain, Ireland, Belgium, and Austria. Find out more.
Find out more about International Delivery to your country, including how long it takes
and how much it costs.
Read our International Returns Policy
*Household electricals, lighting, Your School Uniform, furniture, gift vouchers, magazine
subscriptions, food, wine and flowers cannot be delivered internationally.
10

DELIVERIES
UK standard delivery within 5 days £3.50
UK next or nominated day delivery £4.95
Find out more about all delivery options and timescales.
FREE UK NEXT OR NOMINATED DAY DELIVERY
when you spend £150 or more. Enter FREENDAY at checkout.
Find out more about free nominated day delivery.
RETURNS
FREE to UK stores excluding Outlet and Simply Foods.
FREE to post back to us from the UK using the pre-paid returns label in your
parcel.
Please note, made to order items and bedding can only be returned in
accordance with your legal rights. Please contact us for more information.
Find out about our international delivery service to over 50 countries
Appendix 4
11

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