TAKING extra money from customers’ contactless payment cards as they stand near a till is presumably not Marks & Spencer’s new strategy to make up for falling sales. Complaints that the retailer’s freshly-introduced payment system is a bit enthusiastic about extracting the cash from customers’ wallets is however an embarrassment the retailer could have done without. It needs to seem at home with the latest technology, not at sea in a changing world.
Last week, M&S launched a closely-watched autumn-winter clothing range to general acclaim, seeing its shares rise four per cent in response. Yet hope for the future will be tempered tomorrow by a closer view of how bad things have been in the recent past, with annual results forecast to show profits flat year-on-year – and 16 per cent down on 2011.
Break the numbers down and things look rather tasty for the M&S food division – but decidedly threadbare for its clothing arm.
That split in the fortunes of the firm is not a new problem, but chief executive Marc Bolland is hoping that the freshly released designs will help turn M&S fashion into a product with some of the cachet of its food products. It was to this end that Belinda Earl was brought in last year, from a successful stint at Jaeger. She has passed her first test with the positive reaction to the new offering.
The task remains formidable. M&S clothing has tarnished its reputation for providing good quality wardrobe staples at a reasonable price. But it can’t recover that ground by being boring. Older women are a key demographic, with a keen eye for quality and price, but they won’t be won back if the clothes make them feel old-fashioned. Part of the genius of M&S food has been to combine reassuring quality and a sense of being up-to-speed on food trends.
The latest fashion collection’s modish feel is therefore not just an attempt to persuade the fickle and fashion-conscious young to flock past the readymade meals aisle and snap up some knitwear. That would be a great boost to revenue, but was always going to be a very hard sell. Instead, the new look is designed to send a message to core M&S clientele: wearing this label doesn’t mean being out of touch.
That’s why teething problems with contactless payments are a bad sign: if M&S can’t introduce the latest payment technology without getting complaints, why should analysts trust its promise to start bringing shoppers the up-to-the-moment clothes they want to buy?
TOO COOL FOR YAHOO
Speaking of trend-tapping, Marissa Mayer, Yahoo’s chief executive, has snapped up the microblogging platform Tumblr for $1.1bn (£0.7bn). Tumblr is a happening place, but on the web that also means hard to monetise ($13m revenue in 2012), full of porn, and hostile fans (tumblr.com/tagged/yahoo). Mayer has made a brave move, but it’s hard to buy cool off the shelf.