Superbrands case studies: Marks & Spencer

Originally published in 'Consumer Superbrands Volume VI', July 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.

Superbrands case studies: Marks & Spencer

Case study provided by Superbrands.

Market

Over 100 years Marks & Spencer has become one of the best-known names on the British high street serving an ever-widening range of customer needs.

Marks & Spencer has a wide variety of competitors, from the main supermarket groups, to specialist fashion and homewear retailers.

The rise of home shopping has also changed the competitive landscape, with more and more consumers buying a wider range of products from catalogues and the Internet. High street retailers including Marks & Spencer have to compete, not only against home shopping, but also to meet consumers' rising expectations for better price, convenience and in-store "experience".

Against a difficult trading environment, Marks & Spencer has responded with the introduction of new sub-brands in clothing, a flow of new products in food and the launch of its &more credit card. It has also focused more energy on the home retailing market with new in-store formats, such as Marks & Spencer Lifestore.

Achievements

One of the keys to the development of Marks & Spencer over the years has been the ability of the brand to meet the ever-changing needs of a broad customer base. The core brand values of quality, value, service, innovation and trust have consistently remained the cornerstones of the Marks & Spencer proposition.

In terms of sheer presence, Marks & Spencer has built a formidable business - trading in 30 countries and with more than 300 stores in the UK alone. Its in-store coffee shops now form the third largest branded coffee bar business in the country.

Marks & Spencer also attracted several accolades in 2003/4, including being named World's Leading Retailer 2004 in the Dow Jones Sustainability Index for the second year. It was also ranked by Greenpeace as the top food retailer for its performance on non-GM foods and was awarded the title of 'Most Advanced Supermarket' by Compassion In World Farming in 2003.

In May Marks & Spencer saw off strong competition at 'The Sammies', the British Sandwich Industry Awards winning Sandwich Retailer of the Year 2003 for the second year running. The company's longstanding reputation for innovation was reinforced when it received The Queen's Award for Enterprise Innovation 2003 for the development of a range of machine washable tailored men's suits.

The company has also set benchmarks in caring for its employees and the community. In 2003, its Ready for Work programme, offering work placements to homeless people, was endorsed by Business in the Community for being the UK's biggest employability scheme.

History

Marks & Spencer has experience of more than 100 years of retailing, dating back to the formation of the Marks & Spencer partnership in 1894. Michael Marks was a young Russian refugee who arrived in the North East of England in the 1880s and quickly established a chain of 'penny stalls' across the region. Tom Spencer was a cashier at the IJ Dewhurst wholesale company.

The new company's penny price point disappeared during World War 1. In the 1920s, Marks & Spencer adopted the revolutionary policy of buying stock directly from manufacturers, thereby forming long-lasting relationships with suppliers, some of which have survived to the present day. This practice is still key to the uniqueness of the Marks & Spencer brand and led to the first sale of textiles in 1926. This was a period of rapid growth for the company, with the flagship Marble Arch store opening in 1930.

In the 1930s the staff welfare service was introduced and a scientific research lab was established to allow the company to pioneer new fabrics.

In the late 1940s, before the concept widely appeared in the UK, Marks & Spencer experimented with its first trial of self-service shopping. It was also a pioneer in establishing 'own label' in fashion, with the famous St Michael brand first appearing in the 1950s.

Massive expansion took place in the 1970s in both the product range and opening of new stores. In the 1980s expansion took in out-of-town stores for the first time, with a new store at the Metro Centre in Gateshead. At this time the company also further expanded its product range, introducing furniture and financial services. Furthermore, the Marks & Spencer Chargecard was launched in 1985.

During the 1990s, the company responded to the e-commerce boom by moving into online shopping. Since 2000, the retailer has entered an important new era in fashion, replacing the St Michael brand by an increasingly successful and expanding range of sub-brands including Autograph, Per Una, Blue Harbour and DB07. Store formats have also seen a major change, with the rollout of Simply Food and the launch of a new home products-dedicated brand called Marks & Spencer Lifestore.

Product

Marks & Spencer is perhaps best known for its womenswear, an intensely competitive market of which it has an 11% share. Its challenge is to meet the needs of the older customer while anticipating trends in younger fashion. Women are increasingly shopping by attitude rather than age and are far more willing to experiment. This trend has put pressure on its formalwear offer but also helped to strengthen its position in casualwear.

As part of its response, Per Una, now in its second year, introduced the exclusive Collezione Italia -- a sophisticated high fashion range with slick tailoring. The 2003 Collection included soft separates and leather pieces that were an instant hit with fashion-conscious customers.

Marks & Spencer has been applauded for turning linen from a difficult to handle and exclusive fabric to one that can be machine-washed and worn on all occasions. In the summers of 2003 and 2004 linen featured in both the Autograph collection as well as the main range.

Innovation continued with the development of Marks & Spencer's Accessories range for women. The launch of platinum-plated jewellery in December 2003 was the first of its kind on the high street in Europe and was particularly successful.

Marks & Spencer's Menswear range includes the Autograph label, which saw sales double in 2003/04 with its footwear proving particularly popular. The new Sp range, launched in September 2003, offering footwear and accessories as well as clothing, which also exceeded expectations. A marketing campaign targeting 'dads who are lads at heart' tapped into the thirtysomething zeitgeist.

The Blue Harbour brand has also proved a huge success. Within a year of its launch the brand had become the largest men's casualwear brand in the UK - a market worth over £4 billion per year. Helped by Blue Harbour, Marks & Spencer's share of this increased to almost 7.5% (Source: FashionTrak). In 2004, the collection includes Blue Harbour Vintage, the washed-down offshoot of the classic American-inspired Blue Harbour.

One in three women in the UK wears Marks & Spencer lingerie, another well-known strength. The Truly You collection, launched in spring 2004, features fine laces and satins combined to create a functional yet flatteringly feminine look. 2003 saw the introduction of mw, Marks & Spencer's first cross-branded product bringing together menswear and lingerie for the first time.

This popular line is a sexy everyday range of underwear for men and women.

Beverly Knight, the award-winning soul star, exclusively launched Shades at Marks & Spencer, a range of hosiery specifically designed for darker skin tones.

The arrival of Vittorio Radice as director of Marks & Spencer's Home division in March 2003 signalled a major change in direction for this area of Marks & Spencer's products. A new range was designed to reflect the Lifestore concept, based on lifestyle rather than single decorative styles and encouraging the idea of mixing products and looks. To ensure freshness and variety for customers, up to 12,000 new lines are regularly phased in throughout the year, sourced from more countries than ever before.

Over the years, Marks & Spencer has also gained a very strong reputation for its food. The company's product developers travel all over the world researching ingredients to give customers an exciting, innovative range. For example, they recently travelled to India with top Indian chef Atul Kochhar to discover a new range of regional Indian food. These have been replicated in recipes that have proven very popular.

The food team also journeyed to Hong Kong to research ingredients and cooking methods for a new range of regional Chinese dishes.

Sales of wine were particularly strong, illustrated by the sale of one million bottles of Oudinot champagne in the run-up to Christmas 2003 - 150,000 more than during the millennium celebrations.

Recent developments

In September 2003 Marks & Spencer Financial Services was re-branded Marks & Spencer Money to coincide with the national launch of its combined credit card and loyalty programme, '&more'.

Retail developments included the rollout of Marks & Spencer's new store format, Simply Food, with 40 stores added in 2003. In Speke, near Liverpool, Marks & Spencer unveiled the first in its trial of new store formats, a new clothing only store with cutting edge dÈcor.

The Marks & Spencer Lifestore (above) in Gateshead, opened in February 2004, uniquely featuring a full-size two-storey house designed by architect John Pawson, creating the ultimate environment to showcase its new Home products. The second Lifestore opens in Kingston in Summer 2004 and a third in Thurrock in 2005.

In womenswear, following the success of Per Una, a new brand extension called Per Una Due was launched in May 2004. This is a harder-edged fashion offer, targeting young women from late teens to early 30s as well as the young at heart. Like Per Una, designs from Per Una Du will be updated every eight weeks to keep the collection in vogue.

Promotion

In the late 1990s, Marks & Spencer changed its promotional tack and adopted a much more high-profile marketing strategy. This campaign introduced the 'Exclusively for Everyone' tagline that has become a cornerstone of its brand message.

Since then, the company's promotions have made use of the full marketing mix to target a broad customer base. Customer insight has been key to the development of successful campaigns: for example, the Lingerie Heaven campaign (launched April 2003) was born out of intensive customer research and has not only driven share growth but also increased perceptions of style and range amongst younger customers. In womenswear, the focus has been to showcase the key wardrobe 'staples' that are not only high quality but also stylish: to this end, through-the-line campaigns such as Linen, Cargo and Simply Chic have given Marks & Spencer stand-out in an increasingly competitive marketplace.

With the launch of mw, its cross-branded underwear range, Mary McCartney-Donald was commissioned to create a series of images to showcase the collection using a variety of celebrities including Elizabeth Jagger, Theodora Richards and Jenson Button in media specials. The celebrity theme continued with its third 'Magic & Sparkle' campaign at Christmas.

The 2003 commercial, themed 'Once upon a Christmas', featured an array of stars showcasing a selection of Christmas ideas and presents.

To promote the speciality food retailer's new Oriental range, a television advertising campaign featured a first date scenario. Meanwhile, its Food Love campaign marked a fresh approach by starring groups of customers revealing their passion for Marks & Spencer's food.

The company also promotes its brand via its community-focused activity. Marks & Start, which complements the company's policy of helping others to help themselves, will become the biggest programme of its kind in the UK and Ireland over the next three years, by offering work experience to groups such as the young unemployed, the homeless and disabled people.

Brand values

The Marks & Spencer brand is built on core values of quality, value, service, innovation and trust. Overall, the brand's 'mission' is to make aspirational quality accessible to everyone, through the depth and range of its products.

The brand's 'vision' is to provide a standard against which its competitors may be measured, from customer experience, to care for the environment and community and to the working environment for employees.

© 2004 Superbrands Ltd

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.