M&S online sales slide after website redesign confuses customers
Overhaul of M&S.com and a move from Amazon Web Services take their toll
A rocky start to the year for Marks & Spencer saw online sales slide by two percent over the retailer's financial year ending 28 March, despite attracting seven million customers to the website.
The M&S full-year fiscal results for 2014/2015 show an overall profit rise of 6.1 percent to £661m on turnover of £10.3bn. But, despite enjoying the first rise in profit for four years, M&S did not enjoy the same success with its online retail arm.
M&S attributed the decline in online sales to a design overhaul of M&S.com and a shift from Amazon Web Services to in-house servers.
"Whilst it proved to be technically resilient, the new site presented a bigger change for our customers than we had anticipated, which impacted sales," M&S said.
"We worked hard to address this and made a number of updates to improve the shopping experience."
M&S also highlighted problems with the firm's Castle Donington distribution centre. Huge demand for products on Black Friday overwhelmed the facility, causing a backlog and forcing M&S to extend delivery times.
The retailer admitted that the logistics situation had a detrimental effect on Black Friday sales, but claimed that the firm has addressed these problems and made improvements to systems and the logistics management team.
Online sales may have been in decline, but traffic to M&S.com increased by 15 percent and the company reported that customer satisfaction rose by 18 percent. The website currently has around seven million registered shoppers.
Conversion rates, whereby people purchase the products they view, have also improved, but M&S offered no clear figures to support this claim.
A spokesperson explained to V3 that M&S.com is beginning to "bed in" with customers, which has resulted in a growing customer base and a larger share of the company's overall sales.
Furthermore, the spokesperson said that M&S.com saw a 30 percent rise in the number of people browsing the site on smartphones and tablets.
However, the difficulties over the Christmas period meant that online sales for the year fell a little short compared with the previous 12 months.
The spokesperson also noted that M&S is exploring how its online operation could improve the overall retail experience for customers.
Highlighting a suede skirt worn by UK celebrities and fashion idols such as Alexa Chung, the spokesperson said that the company is using M&S.com as a way to offer popular products that are available only at selected branches.
The spokesperson added that shoppers are directed to the website if the items they are looking for are not available in their local branch, thereby opening the M&S range to all customers even when it is not practical to have its entire product portfolio in every store across the UK.
The challenges faced by the reworking and platform migration of M&S.com highlight some of the e-commerce hurdles that major retailers can face when trying to sell extensive product portfolios online.
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