A key part of Steve Rowe’s strategy for turning the M&S tanker around is to sell products at the right price from the get go and stop relying so heavily on discounting.
At yesterday’s press conference, Rowe admitted that M&S has trained its customers to buy only when there is money off. The retailer, once known for offering excellent value for money, has become synonymous with channel- and category-specific promotions, and flash, mid- and end-of-season Sales. It has followed many of its peers down the discounting path.
The question now facing Rowe and many of his contemporaries – indeed, the industry as a whole – is whether the damage caused by such a devil-may-care approach to discounting can be undone. Rowe seems to think it can.
Since last September, M&S has cut back its promotional calendar by a third. Sales will be dented by this approach in the short term – and this will not please investors. It’s a gamble. Rowe is banking on the fact that shoppers are seeking value for money in the form of keenly priced quality products and a good customer experience.
My fear is that the discounting culture on the high street will make Rowe’s task nigh on impossible. As one chief exec said to me recently: if you decide to trade at full price while your competitors are on Sale, you simply end up with dire sales figures and risk gaining a reputation for inconsistency. It takes a brave leader to hold true to such a strategy, and a charmed one to keep investors on board.
The only way to truly re-educate customers in the UK is to change the discounting culture on the high street, which M&S cannot do on its own. It will require a united effort. Let’s hope this is high on the agenda for new Debenhams boss Sergio Bucher, as well as his peers at John Lewis, House of Fraser, Asos, New Look and some of Arcadia’s fascias, to name but a few.
We’d like to hear your views on discounting and its impact on the industry. To that end, we are going to keep our discounting survey open over the bank holiday weekend to allow more people to take part. Please take 10 minutes to complete the anonymous survey before it closes at the end of Monday, May 30.