Thursday, 10 April 2014

Marks & Spencer's Online Sales Slow After Web Overhaul

Marks & Spencer today revealed 12.5% increase in online sales over the past three months as it overhauled the business and separated from Amazon.

The increase for the fourth quarter to March 29 was almost half the rise in the previous quarter's 22.7% increase and compared to a 28.5% increase in the first half.

The website has had some teething problems with customers complaining of issues with certain combinations of browsers and devices and other glitches. That may have hampered sales but we also think Marks & Spencer has pulled back on online-specific marketing spending to give it more breathing space to iron out such problems.

The relaunch of the website has involved a switch away from an Amazon-run platform to its own - a major shift in strategy - and cost the company around £150 million.

However, as we said at the weekend, we expect Marks & Spencer to ramp up its promotion of the new site in the coming weeks with a significant push expected in May. That is likely to accelerate growth once more and, the company will hope, help lift lacklustre sales across the group.

Marks & Spencer said overall sales in the UK increased 1.5% with total UK like-for-like sales falling by 0.2%.

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