Comment: Beginning to click for high street grand dame M&S
MARKS & Spencer’s decision to install free wi-fi in all its UK stores, and furnish customer assistants with iPads, has wider significance than just being part of chief executive Marc Bolland’s aim to achieve up to £1 billion of e-commerce sales by 2014. The initiative has resonance for the whole retail industry.
When the dowager of the high street, with a generally older, more conservative buying clientele, feels the need for such e-initiatives we know there has been a shopping sea-change. For retail, the internet has become mainstream.
This has been a steadily growing trend, but the most recent figures suggest a step-change in consumer behaviour. The British Retail Consortium (BRC) says that mobile/tablet retail search volumes leapt 139 per cent last April year-on-year compared with total volumes up 20 per cent.
The rise in mobile/tablet search volumes then jumped 93 per cent in May and 114 per cent in June. Obviously, percentage jumps can be more dramatic when coming from a lower base.
But, even so, it is clear that internet shopping revolution is not only under way but has been quickened by the pressure the austerity programme (and periodic global crop and commodity shortages) is putting on consumers’ spending.
“There’s an enormous increase in the use of electronic tablets, iPads etc, and other mobile devices, for online retail searches. There’s a lot of anecdotal evidence of customers who are in stores and who are going online to check competitors’ prices before they make a purchase decision,” says a BRC spokesman.
This trend now looks unlikely to lose steam. Not with a far more internet-comfortable generation coming up than was the case with their parents (in fact the M&S generation).
M&S is trialing the new technology at its new format store at Cheshire Oaks, near Liverpool, where Bolland cut the ribbon yesterday.
Customers will be able to flit effortlessly from browsing the full range of M&S stock on their smartphones to buying merchandise in front of them. Interactive screens will allow customers to make product choices. The high street game is changing before our eyes.
As has been said here before, along with overseas expansion internet retailing has been the main momentum driver for retail stocks over the past couple of years.
As M&S has been the most recent retailer to demonstrate, this digital story does not so much have legs, it is actually lengthening its high street stride.
Kingfisher must brace for emergency repairs
Still on the high street, Kingfisher’s exposure to France has been a stock market plus for some time, with the strong sector positions of both DIY giant Castorama and Brico Depot, the latter aimed more at “professional” DIY-ers and tradesmen, helping the parent when its main UK business, B&Q, hit difficult trading.
But times change, and the fear that France, even in socialist hands, cannot put off its own austerity programme for long, has hit the shares this week.
That’s because Kingfisher’s fortunes are seen as inextricably linked to France. Last year, that country provided half the group’s earnings and two-thirds of its profits growth.
If a screw comes loose across the Channel, the City is worried the shelves supporting the shares will fall down.
On the ball and looking for another big score
BOOKMAKER Paddy Power’s splurge on marketing ahead of the Euro 2012 football tournament looks to have paid off, with a one-fifth jump in half-year profits. Ahead of a ball being kicked and fans flocking in to place their bets (thanks immensely for damaging my wallet, Germany, by the way) Paddy Power increased marketing spend by 74 per cent.
The group, which has expanded from its Irish and UK heartland in recent years, from Australia to Canada, is also to step on the gas with its second half investment in the business, it says.
In line with the betting industry (and retailing, see M&S item above), Paddy Power is ploughing more into its online offering. The group, which entered Italy this year, aims to have 15 per cent of that market within two years.
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