M&S 'In The Closing Stages' Of Switching On New Website

Marks & Spencer is poised to launch its new website following a difficult trading during which internet sales rocketed.

The clothing retailer's chief information officer Darrell Stein said systems managers are in the 'closing stages' of switching from using the Amazon platform.

'We are live with three out of the eight systems - the back-end systems - and we will put the front-end stuff on [beginning this month]. That's going to go live by Spring,' he told Cio.co.uk.

He said that Marks & Spencer was 'renting' the Amazon platform but it was increasingly critical to switch to its own systems.

The tie-up with Amazon was agreed in 2005 and launched in 2007. But Stein told said: 'The problem with using Amazon is that you have got a key growth area for your business being run by a competitor - they are now also selling general merchandise online.'

He explained that M&S was not able to change the systems as frequently as it wanted. 'They were trying to drive it down more of a package route and we want to be really flexible and change it every five minutes. It was completely divergent.'

He said internet sales have grown from £30 million to £700 million during its partnership with Amazon.

He also told Computer World that M&S is currently testing SAP HANA to help it monitor real time stock availability. He said monitoring stock so closely was not a necessity in the past.

He explained: 'Previously you could order overnight, it was in the store the next day - but the internet has blown all that away. You need to know what you have got right now so you can show your customers in real-time.'

He said it was a 'key infrastructure project' that is still in 'validation mode'.

John Lewis Sells A Third Of Its Goods Online Over Christmas

A third of all sales at the John Lewis department store over the festive period were made on its website.

Online sales rose 22.6 per cent in the five weeks to December 28 compared to the same period a year earlier meaning that JohnLewis.com accounted for 31.8 per cent of the retailer's total revenues, according to figures released today. Click and collect orders were a major contributor rising 61.8 per cent.

Total sales at the company increased 7.2 per cent to £734 million. Sales rose 6.9 per cent on a like-for-like basis, which strips out the effect of new stores.

The company hailed the period as a record Christmas outshining rival Debenhams who complained of a weak online performance. Debenhams was forced to rush out a statement earlier this week warning the market that profits in the financial first-half would fall 26 per cent to about £85 million after like-for-like sales increased just 0.1 per cent.

John Lewis managing director Andy Street said: 'This Christmas has seen trade take a different shape to previous years, with an early peak driven by Black Friday and a huge surge in the final 10 days. Many of the big online shopping days and weeks occurred earlier in the period but shops were packed in the last-minute rush on 'manic Monday' [December 23].'

He said: 'The shift to mobile devices for online shopping has been confirmed but the in-store sale is well and truly thriving, as shown by the record first day for Clearance in our shops on 27 December.'

John Lewis said sales at its shops increased 1.2 per cent, stripping out the effect of online.

It said Black Friday - which fell on the last Friday in November - was the biggest ever online day and the week before Christmas was the biggest ever for the whole business breaking £160 million sales for the first time.

Electricals and home technology sales increased 10.7 per cent on last year, fashion and beauty rose 8.5 per cent and home grew 2 per cent.

Online Push Fails To Bring Debenhams A Happy Christmas

Debenhams was forced to issue a profit warning yesterday after a poor online performance and a 'highly competitive' festive retail market.

The department store said online delivery was 'lower than anticipated' and blamed weak clothing sales and unseasonal weather for the dire numbers.

Profit for its financial first-half is now expected to drop 26 per cent to £85 million, it said in a statement. Same-store sales in the 17 weeks to December 28 rose 0.1 per cent - well below inflation and equivalent to a sales drop in real terms.

The chain was not due to update the market for two weeks but was forced to release the statement early because of the material impact the poor performance will have on profit.

Despite the disappointment in the online performance, internet sales grew 27 per cent for the 17 week period and now account for 15.6 per cent of total sales compared to 12.4 per cent in the same period last year.

The rushed statement does not bode well for other retailers in competing categories. Analysts have already warned that Marks & Spencer's Christmas performance will mean this year's profits will be the worst for five years.

Debenhams said: 'We did not experience the anticipated final surge in sales in the last week of the period and as a result we expect the need for additional markdown to clear stock in January and February.'

John Lewis Online Sales Hit £1bn

Department store John Lewis has announced annual internet sales have exceeded £1 billion for the first time.  

The retailer said it has invested almost £40 million during a three year project to reorganise its internet division and offer. It said the strategy and increasing popularity of the site has meant it hit the £1 billion target a year early. 

Online director Mark Lewis, who joined the retailer in January from courtier service CollectPlus and formerly at eBay, said: 'Passing the £1 billion milestone an entire year ahead of schedule is a fantastic achievement for us and a reflection of how central online shopping has become for customers.'

It said the mark was exceeded on a 52-week rolling basis and represents gross sales, that is, including VAT. Total sales at the department store chain increased 13.5 per cent last year to £3.8 billion. Rival Debenhams said its multichannel sales in the year to September were £251 million on sales of £2.7 billion. Marks & Spencer's online sales are estimated to be about £650 in the year to March on total general merchandise sales of around £4.3 billion.

Tori diamond print dress from
Collection by John Lewis 

The web site now includes wish list function and the inclusion of a search history. John Lewis said mobile now counts for over 25 per cent of traffic to the site and it has also improved its mobile offer to mirror the design of the main site and plans to launch a new app later this year.

John Lewis IT director Paul Coby said: 'With sales at johnlewis.com up over 40 per cent in 2012 we are seeing an unprecedented pace of online growth and customers are making more demands on our website, than ever before.'

'The billion-pound success is a reflection of out strategy to put the customer at the hear of our online operations.Early testing at every stage of the build and inviting over 3 million customers to use our beta site before full launch has resulted in what we believe will be an outstanding experience and journey for customers,' he said.

Internet Sales at Marks & Spencer surge 23%

British High Street giant Marks & Spencer said online sales surged 22.9 per cent in the past three months as shoppers used its 'click and collect' service.

The rise is faster than the 10.8 per cent reported in the previous three months and will take total multi-channel sales in the year to around £650 million, it is estimated.

The increase helped the company to marginally beat analysts expectations of a 4 per cent drop in clothing and home wares sales. Like-for-like sales in clothing and home dropped 3.8 per cent. Marks & Spencer only offers a small food service online and the vast majority is clothing and home products.

It also said sales from mobile phones grew 70 per cent compared to last year after it improved its mobile site. It said its e-commerce distribution centre will begin to open next month ahead of the relaunch of its entire web platform in a year's time when it separates from Amazon.com.

'Multi-channel sales growth accelerated,' said chief executive Marc Bolland.

Group sales rose 3.1 per cent and total UK sales increased 2.6 per cent after food sales climbed 6.3 per cent. Total like-for-like sales (sales from mature stores open at least a year) increased 0.6 per cent and food sales on that basis increased 4 per cent. Overseas sales grew 7 per cent.

'We are working hard on improving our performance in general merchandise (clothing and home products) and, despite difficult trading conditions, we made progress in our operational execution,' he said.

The company said it held prices during much of the quarter but introduced tactical offers in March as promotional activity across the market intensified.

Comment: Marks & Spencer Faces Biggest Test Online

All eyes in the City of London will be on UK retail giant Marks & Spencer this week. Sales are expected to be down again. But observers should be looking for clues to the company’s future, not in its bursting stockrooms, but in its online sales.

Online spending is proving more than ever to be the saviour of forward thinking High Street chains. Clothing chain Next and department store John Lewis are two prime examples. Both have long established interest in the potential of online growth going back well over a decade.

At that time many at Marks & Spencer were still among those who gave the impression they thought internet was a fad. At most, something they would consider over time if their customers showed any interest. That came back to bite many a venerable old retailer (HMV to name one but clothing retailers were among the most guilty) and the British High Street is still suffering the consequences.

In 2007 M&S struck its deal with Amazon.com that would see the internet giant providing it with its online platform. Before then it did not have anything even approaching a comprehensive online offer – some home wares and other bits and pieces (read the 2006 annual report – the words ‘web’, ‘online’ or ‘internet’ merit barely a mention other than to direct people to corporate and shareholder information sources).

In 2007 then chief executive Sir Stuart Rose was talking about of sales of around £100 million (the actual figure was a little vague). He wanted sales of £500 million in five years. Last year it hit £559 million. So far, so good. But that is not to say it shouldn't have been far higher. Next's catalogue and online sales account for a third of its total revenue. For M&S that would be about £1.5 billion. The crutch in the form of the Amazon deal, some feel, has become more like a ball and chain.

New chief executive Marc Bolland in autumn 2010 said he wanted to deliver an additional £800 million to £1 billion to its internet sales by 2014 – next year. The company scrapped its entire set of targets less than a year ago because it said growth was being hampered by the recession. That growth target, looking back, seems ludicrously ambitious and would have required an estimated growth of around five-fold to £1.3 billion or more.

So, where are online sales now and where should they be? If they have exceeded £700 million by year-end (which happened last week) that will mean they have grown 25 per cent in the past year. That feels unlikely (they grew 18 per cent last year and half billion-pound units in any business usually face dwindling sales growth just by virtue of their sheer size).

Even so, that growth would only add 1.5 per cent or so to its overall sales, about 3 per cent to total clothing sales. Is that enough to counter a sales drop in its High Street clothing stores? Not this year. Maybe next spring when Marks & Spencer is released from its Amazon contract. But every year lost to under-achievement is another to catch up on later. The food business is going great guns for now but that won’t always be the case.

Marks & Spencer’s board needs to fix its online business and fast. The future isn’t waiting for them.

Boost to online sales in March amid freezing temperatures

Internet shopping sales rose in March amid freezing conditions on the High Street as many shoppers chose to stay home to avoid bad weather. 

Barclaycard said internet sales in March increased 12 per cent despite the lack of appetite for Spring fashions. That compares to overall growth in consumer spending of 2.5 per cent and sales growth on the High Street of 0.4 per cent, according to a report. 

That is slightly slower than the 13 per cent rise in online sales in February but continues to indicate the strength of online growth as High Street sales stall.

Overall spending should have received a boost from the early timing of Easter with three days of the Easter weekend falling in March. However, sales at DIY stores, which often compare the Easter boost to Christmas for other shops, are understood to have seen sales decline by about 11 per cent compared to the same month last year.

Spend on women's clothing stores fell by 10 per cent with men's down 7.4 per cent, the figures indicate.

Spending in restaurants (total spending up 9.8 per cent) and cinemas (up 8.8 per cent) benefited from some of the surplus cash as people looked for ways to treat themselves. Sales of electrical goods soared 8.4 per cent in stores and 36 per cent online. While utility bills also jumped up 15.5 per cent as Britons spent more cash on keeping warm and because charges have risen well above inflation.  

But the data also suggests firms are adapting, the report said. While department stores’ sales fell 7.5 per cent overall, online sales increased 18 per cent.

Opinion: Barclaycard says its numbers account for around half of all spending. Clearly that is not the whole picture and could be skewed towards more affluent shoppers. But they also track payments through credit and debit card payments in systems they monitor through a host of retailers so the figures provide a strong indication of the direction and speed of travel. 

This week Marks & Spencer is expected to become the latest retailer to complain that weather hit sales. Chief executive Marc Bolland is expected to emphasise the strength of his online business to convince shareholders the business is achieving a turnaround. He will say clothing sales in stores open at least a year and online fell by about 4.5 per cent. That brings the annual rate of decline in the year to the end of March to 4 per cent, City analysts have calculated.