Marks & Spencer descends the price ladder to fight the rush

As niche and mass labels flood the women's apparel segment, the British retail brand halves prices in some categories and gets more local with its styles

The times are rocky for British retail brand Marks and Spencer (M&S). Globally, it has been forced to shutter down stores as sales have tumbled across categories. But in India where it has the maximum number of retail outlets after the UK, the brand is still holding out against a growing tribe of homegrown and multinational challengers. Apart from global heavyweights such as Zara, H&M, even relatively newer local brands such as AND and Triumph among others, have been snapping at its heels and forcing its hand on pricing and localisation. 

James Munson, managing director M&S India, says that the brand has been nimble on its feet and gained from its aggressive entry-level product positioning. He points out that the brand will be up on eight new storefronts by the end of FY 2018 and that is a measure of its longevity in the country.

Lowering the entry barrier

Munson says that they have been particularly successful with their entry-level products across categories and are providing a larger selection at low-to-mid level prices.  “Our global strategy is to put our customers at the heart of our business and we are committed to being competitively priced in all the markets where we operate,” says Munson. 

The brand has been slow to communicate its value proposition to the Indian customer  in the past and over the past few years, there has been a concerted effort to change this. “M&S has always offered excellent value, however, we want to do more to show this to our customers in India and are communicating more about our opening price points such as our Rs 799 lingerie,” he adds. India is not the only country where M&S is doing more to get its value across. In the UK market too, it is reducing prices on 2,400 products. 

Jaydeep Shetty, CEO at fashion chain Mineral says: “By adjusting entry-level price points, they are able to attract a larger base of customers. They are not worried about positioning in terms of the premium-ness of their brand.”  

With greater clarity within the group on the different categories and prices, M&S simultaneously reduced its promotional activity. Munson says that this put an end to the confusion that many customers said they had about the products being too expensive or too heavily discounted. 

“Not only have these changes given clarity to our customers, but they have made our sales more profitable and boosted our full-price market share,” he adds.

The bestsellers are still the lingerie collection, where the opening price of Rs 799 is half that  of Rs 1,599 earlier) and the category now has 12 styles. Munson says it has sold 86,000 pieces since the new pricing policy was initiated last year.

A similar plan is in place for  women’s apparel where the opening price point is Rs 1,999 apiece across 15 lines. The chain says that it has seen 62 per cent year-on-year growth in this category too. 

Adapting to local tastes 

Of the 16-odd years that M&S has spent in India, five have been with Mukesh Ambani’s Reliance Retail. And many trace its strong stand on pricing, Indianisation and providing a more varied set of choices in terms of styles and colours to this alliance. 

The heavy localisation element is most visible in the women’s section where M&S has increased the range of styles, sizes and colours. M&S treggings (women’s leggings are designed to resemble a pair of trousers), for instance are available in multiple colours and prints and grew 26 per cent last season. Treggings account for four per cent of M&S’s total womenswear sales.

Initially in 2012, the year it teamed up with Reliance Retail and also the year that saw a big rush of local and international brands in the category, M&S responded with a 20 per cent cut in prices. But it was just following the herd at the time say analysts. Both Zara and H&M had already placed local tastes and price at the centre of their India strategy. 

Baqar Naqvi, director at Wazir Advisors says, “Earlier price was a key element in positioning and premium brands needed to maintain a certain price positioning. H&M and Zara changed that rule and others are following,” he says. Over the years M&S has further honed this strategy to keep a clear line between the different price levels in its stores while adding more variety at the lower price points

This will help with the penetration efforts that the brand is now undertaking. The chain has 61 stores at present and sells though inhouse and other e-commerce platforms. Though online sales are small, it is doubling every year, Munson says.  M&S has also expanded into cities such as Raipur and Jaipur and looking at opening more stores there. About 19 of its stores are in tier -II cities and contribute one fifth of total sales.

M&S has also become more open to a more flexible stocking policy to cater to the wide differences in customer tastes in India, sometimes within the same city and at times between geographies. In Guwahati, for instance, over 60 per cent of the sales come from womenswear, which is M&S’s biggest business unit. But  Munson says, in Kochi menswear is dominant. He adds, “Kochi has the largest contribution to this category, 42 per cent to our sales”. And merchandise is stocked according to the needs of individual cities, Munson says.