Marks & Spencer seeks to generate third of sales from overseas
Marks & Spencer is looking to derive as much as 35% of its revenues from overseas markets compared with the current 5% as it seeks to reduce its reliance on its core domestic market. By Glynn Davis
Speaking at the recent World Retail Congress 2012 in London, Marc Bolland, chief executive of Marks & Spencer, told delegates: “Consumers are international but we’ve 95% of our sales from the UK so if the UK is under pressure then we’re under pressure. We need 35% overseas exposure.”
These sales will be generated from a mix of international stores and a multi-channel capability, according to Bolland, who says “consumers will shop internationally and multi-channel and so M&S needs to be there”.
In contrast to when the business initially moved overseas 18 months he says the management teams now comprise a mix of local experts and M&S people. These teams are located in “priority markets” that include India, Shanghai in China, Russia and the Gulf.
As many as two new stores are being rolled out every week with strong franchise partners who are helping change the perception of M&S abroad. “It’s not just us but also the franchise partners [we need] who are willing to open stores. Two-and-a-half years ago people questioned whether they wanted an M&S in overseas malls, so we want to change that,” says Bolland.
The other important plank in the group’s growth overseas – and also at home – is multi-channel and by the end of the year he says the company will have 16 overseas transactional websites including a tough market or two as he regards that as helpful to the group’s future growth prospects.
“Let’s go to a difficult country as otherwise we’ll never learn,” says Bolland, adding that M&S is moving fast in order to keep ahead of the pack with its multi-channel activities. He cites the fact that social media did not exist in the business’s thoughts two years ago but it now has 1.5 million followers on Facebook.
He also points out that he bought an iPad only two years ago but that today M&S is even issuing its sales assistants with the mobile devices. “You need to be in the game and it is having an amazing effect on staff as they see they can be part of this world,” explains Bolland.
A crucial part of growing its online operations around the globe is moving it off the Amazon platform and onto its own proprietary base. The challenge is that this new platform needs to be able to cope with forecasted online sales at M&S of between £1 billion and £2 billion.
“It needs to be as solid as Amazon in the background, and as sexy as Net-A-Porter at the front end,” suggests Bolland.
He also reminded delegates at the Congress of the continued push by M&S with its Plan A sustainability agenda. But he highlighted that it was an ongoing challenge engaging customers: “Today’s role models are the wrong role models. It’s footballers who have seven cars and don’t know which one to drive, whereas being ‘green’ lacks status, desire and aspiration.”
In order to address this issue he called on businesses to “get customers engaged and to get them aware of sustainability issues”. He cites M&S ‘Schwopping’ initiative as a move in this direction. Bolland also acknowledged that he commits as much as 5% of his working hours to the company’s sustainability agenda. “If we all did this it would be a good start,” he says.
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