More Store Closures Announced by M&S – Is It the End for Traditional Retail?
The long-established British retailer Marks & Spencer has announced further plans to close more than 100 stores by 2022 as part of a “radical transformation” of the company.
The company said that the 100 stores earmarked for closure include the ones that have already closed this year and the 14 announced today. Shares in the group dropped almost 3 per cent since the news broke.
M&S have struggled along with many big players on the high street with a shift in spending and consumer behaviour. In particular its clothing sector has proved difficult and the group have tried various strategies to turn this around.
Sacha Berendji, retail, operations and property director at Marks & Spencer, said: “We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans. Closing stores isn’t easy but it is vital for the future of M&S.”
Dr Felicity Hardley, Senior Lecturer in marketing and business strategy at Westminster Business School, comments on the latest news from M&S and why changing consumer behaviour means the sector should expect further woes this year.
“Today’s announcement, combined with recent grim news about the retail sector and household names in troubles – think of Toys “R” Us closures and difficulties for House of Fraser, Next and Debenhams, further validates that profit warnings, restructurings and more big name retailers highlighting their woes should be expected this year. Consumer behavior has fundamentally changed and unless the retail environment adapts to not only these changes, but to fundamental shifts in the competitive environment, we may see more retail brands going under. We are moving into an experience economy where the customer journey is paramount. Online providers understand this and have engineered their whole service offerings to more adequately meet customer needs and expectations. Many existing retailers are still playing catch up and this may cost them dearly in the long run.
“The digital environment combined with growth in the proportion of digitally savvy consumers is making the creation of value more complex, particularly as more and more consumers look for specific products, segmenting the marketplace into more segments than previously thought possible. Digital marketers can tailor online offerings and communicate them to multiple and unique small customer audiences, however, it is harder for standard department stores such as Debenhams and M&S to create a value offering for an increasingly fragmented customer base. As the ONS figures indicate, the department stores who have adjusted more to consumer behavior around Mothering Sunday and Easter (greater digital demand possibly triggered by poor weather) and who have more closely considered consumer needs online, outperformed those that are yet to hit the mark.
“Department stores used to be effective one-stop shopping, but the likes of Amazon can deliver on this concept better than its offline competitors. What this means in practice is that we may end up seeing fewer big department stores selling a bit of everything, and instead see growth in specialist stores or even pop-ups that offer an ‘experience’ in addition to a product or service.
“In the current tough environment, competitors need to think creatively about how to make shopping an entertaining experience, or at least an experience consumer will value. With the increasing use of social media consumers have less time to ‘shop’ and instead prefer to dedicate themselves to alternative leisure activities. Price matching online competitors is not enough. Retailers not only need to think innovatively to compete in both spheres, but they also need to think about how to ‘outlive’ rivals as there may always be room for a couple of high street department stores, but not enough for the number of competitors currently in the UK marketplace.”
The shopping experience and USP is key with today’s demanding consumer, which is why the ‘pop up’ has become an ongoing success. Everyone from up and coming designers to established brands have embraced the ‘pop-up concept store’ combining events with product and minimizing costly rents and rates.
FashionCapital is currently working on a retail pop-up concept that will house the designers and brands that we work with, due to open in autumn 2018! Watch this space for further details.