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Editor's Comment: What's next on Rowe's M&S to-do list?

Keely Stocker

It’s September. The kids are back at school and retail news is back in full force. The big story this week comes from Marks & Spencer.

The retailer is cutting 525 head office roles as part of Steve Rowe’s turnaround plan for the business.

It is nine months since it was announced Rowe was to become chief executive of M&S. Since he took over from Marc Bolland in April this year, the industry has waited impatiently for further details of his strategy. Now we know head office is to undergo a long-overdue slimming-down.

Job cuts are always unfortunate for those affected, but in M&S’s case, they were necessary to streamline the business and make it run more effectively. Others in the industry have made similarly difficult decisions, as organisational structures change in response to the market.

For many high street retailers, roles have become duplicated across channels, so teams have been restructured to ensure greater integration and a more streamlined approach. M&S is ploughing money into trying to turn around its fashion division, which includes changing its pricing and discounting strategies, so the pressure is on to cut costs elsewhere. The changes should also help it become more reactive.

M&S’s wider strategy must include a clear target customer – not just a vague nod to “Mrs M&S”

M&S would do well to take a look at Shop Direct as an example of a business that reacts quickly to shifts in consumer behaviour. This week the now pureplay etailer revealed its fourth consecutive year of sales and profit growth.

The business has cited mobile as one of the key channels to driving this growth, which highlights why it has been so successful: it anticipates trends and embraces them.

Whether shopping on mobile, online personalisation or image recognition apps – to name just a few innovations – the Shop Direct team works in an agile way, researching and embracing new technologies and shopping behaviours. I don’t doubt that this has involved some trial and error, but Shop Direct has proved why it is important to be nimble, swift and responsive.

There is an argument that part of the reason this works for Shop Direct is because of its young audience and, to an extent, that could be true. However, it can no longer be said that older generations do not use smartphones or shop on digital platforms. Many a consumer survey has disproved this. Each business must look at its overall strategy, and organise the teams that run it in the most efficient way to support the business and appeal to its customer.

Rowe’s decision to reduce head office numbers should help M&S to become more responsive. But it the industry and investors will be anxious to hear at his next planned update in November what further changes he intends to make. Structure is important but, to succeed, M&S’s wider strategy must include a clear target customer – not just a vague nod to “Mrs M&S” – improved store strategy and, of course, getting the fashion product right.

 

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