Marks & Spencer PLC Plan A.Introduction.The total value of UK retail sales were £333 billion in 2014 and 9% of all VAT-registered businesses in the UK retailers, with the total number currently at 192,595. A third of consumer spending goes through these shops and the retail sector generates 5% of the gross domestic product of the UK. (retaileconomics.co.uk 2015). Marks & Spencer PLC has been part of the British high street for over 130 years, starting out as a small penny stall in a market in the City of Leeds, to the iconic £10.3 billion retail brand it is today, employing 83,069 people worldwide. The company has always had a strong ethos of fair trade, treating its staff well, building strong long-term relationships with its suppliers and developing new and initiative relations with its customers from the company outset. (D. Grayson, 2011). Marks & Spencer was the first high street retailer to allow customers to enter their shops without paying for the privilege, prior to this, the proviso was that a customer entering a shop had to buy an item, something that is taken for granted today but in 1894 was unheard of. (marksandspencer.com 2015.) In 1997 the company became the first British retailer to make a pre-tax profit of over £1 billion, although subsequently it went into a sudden slump, which took the company, its shareholders, who included hundreds of thousands of small investors, and nearly all retail analysts and business journalists, by surprise. The reasons were the increasing level of profit margin, the refusal of the company to accept credit cards, the principle of the company to deal with mainly only British suppliers. (research-methodology.net 2012). In 2004, Marks & Spencer's was in the throes of an attempted takeover by the BHS boss, Philip Green, which was only thwarted by a huge backlash from its shareholders and its new chief executive Stuart Rose. (D. Grayson, 2011). Plan A.In 2006 Stuart Rose, later to be knighted Sir Stuart Rose, read former US Vice President Al Gore book “An Inconvenient Truth: The Planetary Emergency of Global Warming and What We Can Do About It” and after showing the 100 top people in the company the documentary film from the book, sowed the idea of changing the way Marks & Spencer operated. (www.theguardian.com. 2007). On 15 January 2007 Stuart Rose launched “Plan A - because there is no plan B and because we only have one planet”, a £200 million, 100 point programme of turning Marks & Spencer into the greenest, most sustainable retailer in the UK by 2012. Up until this point, Marks & Spencer had spent some 10 years playing catch up with the rest of its retail competitors on the high street, losing large amounts of it’s market share it had taken for granted for over 100 years because it failed to adapt to the new global markets that emerged in the 1990’s. The 1990’s saw the rise of the world wide web; know today as the internet, which enable the consumer to become more easily aware of bad practices and policies of companies and corporations around the world, this made companies begin to adopt Corporate Social Responsibility (CSR) policies. Though Marks & Spencer had always had a highly ethical company ethos towards it’s staff, suppliers and customers, with the introduction of Plan A, it was the first UK retailer to implement a social, ecological and environmental commitment plan. The commitments span five themes; climate change, waste, sustainable raw materials, fair partnerships and health. The aim was that, by 2012 it would; become carbon neutral, send no waste to landfills, extend sustainable sourcing, set new standards in ethical trading and help customers and employees live a healthier life style. (www.environmentalleader.com. 2007). This boded well with its more socially and environmentally aware customers whom in March 2007 voted Marks & Spencer's the U.K.'s best supermarket in the Times newspaper. (www.theguardian.com. 2007). Despite costing £40 million in its first year and seeing an 18% fall in the share price in the year following the implementation of Plan A, Marks & Spencer pledged to commit to the scheme. This commitment paid off, with a £50 million net benefit saving within 3 years of Plan A’s launch. In May 2008, Marks & Spencer introduced a 5p charge per plastic bag in its food halls, with the profits going to the charity Groundwork UK and within six months the scheme had raised £500,000 for the charity and resulted in 80% reduction in plastic bags. (www.h2g2.com. 2008.). To date 2.8 billion plastic carrier bags have been saved and £10 million has been raised for various charities. By 2010, Plan A, with a net saving of £50 million, resulted in a further 80 commitments being added to the scheme and by the end of its 5 year plan had achieved a £185 million net benefit savings. (corporate.marksandspencer.com 2012.).Though originally Plan A was a corporate social responsibility (CSR) platform, it became recognised as the most comprehensive of any major retailer anywhere in the world and the results were impressive. Plan A 2012 Results.By 2012 the company's emissions were reduced by 23% and net CO2 emissions from the operations in the UK and Republic of Ireland (RoI) were zero. All stores, offices, warehouses and new builds sent no waste to landfill and achieve a 28% reduction in their volumes of waste overall. Between 2010 and 2012, the company provided training and education around health, employee rights and financial literacy to 244,000 workers in its supply chain in India, Sri Lanka, Cambodia, Bangladesh and China. 50% of the products sold – more than a billion – had a Plan A eco or ethical quality, such as being Fairtrade, carbon neutral, made from sustainable materials or delivering health benefits to the consumer. Through a scheme called Swhop in alliance with Oxfam, customers donated 3.8 million garments and helped raise £3.5 million for the charity.Marks & Spencer delivered 139 of its 180 commitments and earned it self more than 150 sustainability awards from various non-government organisations (NGO’s) around the world. (corporate.marksandspencer.com 2012.)While other retailers had rolled out CSR programmes as part of their corporate plan, none had made it as transparent and visible as Marks & Spencer had done through its website and all this achieved during one of the largest recessions ever known. By now Plan A was deeply embedded in Marks & Spencer corporate strategy, helping it to avoid the horse meat scandal (forumforthefuture.org. 2014) and the Rana Plaza collapse in Bangladesh (www.iso.org. 2015) which engulfed many of its competitors. Not content with becoming the most sustainable retailer in the UK, Marks & Spencer set the goal becoming the most sustainable retailer in the world by 2015. They realised that they could not do this alone and brought in independent advisers from several NGO’s to set up The Retailers Advisory Board and an independent audit company Ernst & Young LLP. The Retailers Advisory Board consist of: Marc Bolland M&S CEO, Jonathon Porritt from Forum for the Future, Martha Lane Fox M&S Non-Exec Director, Aron Cramer President & CEO of BSR, Mark Goldring CEO of Oxfam UK, Danny Truell CIO of Wellcome Trust, David Nussbaum CEO of WWF UK, Peggy Liu Chair of Joint US-Chain Collaboration on Clean Energy, Ritu Kumar Director of TERI-Europe and Joanna Lumley Worldwide Ambassador of Plan A. The Advisory Board was created by Marc Bolland, as incoming CEO, specifically to help him and his executive to keep aiming high. They were encouraged to act as ‘critical friends’, both at and between the twice-yearly meetings, and were impressed at the level of openness and the quality of engagement that characterised the Advisory Board’s proceedings from the start. Ernst & Young LLP are an international professional service audit company based in London, who provided independent assurance services in relation to Marks & Spencer's Plan A report, to show targets achieved and missed. (planareport.marksandspencer.com. 2015). The point of these two independent bodies is seen to prevent Marks & Spencer of being accused of green-washing and to give viability and credibility to their Plan A reports. By 2015 Marks & Spencer is able to roll out some very impressive statistics, which are taken directly from their Plan A 2015 report.Plan A 2015 Results.Net CO2 emissions from the operations in the UK and Republic of Ireland (RoI) were zero; 2,000 work placements in M&S stores and offices for the young unemployed, 62% of whom have gone on to find employment; All stores, offices, warehouses and new build projects sent no waste to landfill since 2012; 652,000 workers in their worldwide supply chain have received training since 2010; £625 million net benefit generated by Plan A since 2007; Almost two thirds (64%) of M&S products now have a Plan A attribute, an eco or ethical quality over and above the market norm, an increase of 7% over 2013/14; Almost a third (32%) of the cotton used to make M&S products now comes from more sustainable sources; 100% of the palm oil used in M&S products is now covered by Roundtable for Sustainable Palm Oil certification; Energy efficiency in their UK and RoI stores, offices and warehouses has been improved by 36% against a 2007 baseline; More than a quarter (26%) of the leather used to make M&S products now meets the industry leading Independent Leather Working Group Standard (five years ahead of target); Energy efficient and long lasting LED lighting has been fitted in 417 stores; £2.45m raised for health and wellbeing charities, including £1.3m for MacMillan Cancer Support and £700,000 for Breakthrough Breast Cancer; Constructed the UK’s largest single roof mounted solar panel array on top of their Castle Donington distribution centre; Cut the amount of packaging they use for home deliveries by 60% against a 2009 baseline. 100% of directly purchased electricity in the UK and RoI comes from renewable energy sources and have started to move into bio-methane gas supplies. (planareport.marksandspencer.com 2015). Plan A 2015/20. These are but a few of achievements that Marks & Spencer put claim to through their website and are being recognised worldwide for these achievements, but they are not resting there as they begin to roll out Plan A- 2020. Though Marks & Spencer is being championed through political, NGOs and business organisations throughout the world, they have seem to have missed the opportunity to highlight Plan A to their customers. Marks & Spencer claim to have 23 million customers per year but according to the Plan A website they have only managed to engage 1 million of those customers online or through social media. This is less than 5% of their customer base, highlighting a missed opportunity in their marketing strategy. In 2006 Marks & Spencer's ran the highly successful “Look behind the label” campaign, which highlighted the sustainability and environmental credentials of their products through TV, radio and newspapers. Up until researching this paper, the author of this paper, authors family, friends and colleagues, of which some are shareholders and all are customers, had not heard of Plan A. According to The Telegraph newspaper, the average M&S customer age is now 49 years old, significantly higher than any other major retailer. (fashion.telegraph.co.uk. 2015.). The problem being most of Marks & Spencer customers are of an age that don't use online or multimedia as a resource to be informed, many are still stuck in the analogue age of TV, radio and tabloid newspapers. SMART analysis. Specific. The lack of awareness and scope of Plan A within its customer base is a missed opportunity to highlight the far-reaching effects the CSR platform, Plan A has so far achieved. Measurable. From their website they credit the actress and much loved celebrity, Joanna Lumley as their Worldwide Plan A Ambassador. Surely a TV radio and tabloid campaign with her explaining the positive and far-reaching effects that Plan A has achieved to date in the UK and around the world would be a more penetrating marketing tool to reach their customer base and enhance their image. Achievable. Joanna Lumley is used in Marks & Spencer’s successful Swhop campaign in conjunction with Oxfam, raising over £15million for the charity and 20 million garments donated. She was also the figurehead in the very successful campaign in 2009 to highlight the plight of Gurkhas and their families who retired before 1997 to settle freely in Britain. (www.telegraph.co.uk. 2009.) Basically she is someone that is endeared and trusted by the older generation of the UK. Realistic. Full disclosure the achievements of Plan A to its customers and the general public through a TV, radio and tabloid paper campaign would only enhance Marks & Spencer’s corporate image. Marks & Spencer invented the great user experience. Sure it was before everything went digital, they invented the concept of the no quibbles speedy refund before any of us even new what an iPhone was. Service foundations like these underpinned their brand that stood for reliability and trust. An old-style marketing campaign could possibly get generations talking about the merits and ideologies that Plan A encompasses, highlighting to old and young alike, the social and environmental achievements of Marks & Spencer and potentially make them trendier to a new younger customer base that are more environmentally aware. Timely. For the seventh quarter in succession, Marks & Spencer’s chief executive Marc Bolland has reported a downturn in sales of general merchandise. Though its food sales are up, catering for the higher end of the market, avoiding the shift in customers that the likes of Aldi and lidls are causing Tesco’s and Morrison’s, their clothing ranges are losing their thread. It’s well documented in the press that Marks & Spencer are trying to please to too many age groups with to many tastes. Marks & Sparks, as it is affectionately known, is where you go to get a well-made work suit, a white shirt, well fitting comfortable underwear or a nice dressing gown that is now made from 32% sustainably grown cotton, not the latest trend that is old hat before you get it home. If they lose their clothes section in the market place, then they lose household products that they sell that a customer would buy, because it is convenient to do so whilst in the store. Conclusion. Plan A has caught all of Marks & Spencer’s competitors out in its diversity and depth. It has also given the company worldwide recognition as an ethical, environmentally and socially aware multi-channeled international brand that can be and is trusted. As it begins to move in to the new markets opening up in the BRIC group of countries (Brazil, Russia, India and China) these endorsements of their integrity can only bode well for Marks and Spencer in the global market place. The shareholders should be content with the £625 million net benefit generated by Plan A since 2007, whilst expanding its total stores from 541 in 2007 to 1386 worldwide in 2015. It regularly engages with its stakeholders, be it consumers, staff or suppliers in its vast supply chain with a transparency that not many other retailers adhered to. But still, it struggles to maintain a constant in its clothing range on a consistent basis, which is its main revenue stream. It is Britain’s largest clothing retailer with over 11% of the market share but analysts predict that it could lose that boast by 2016 to its nearest high-street clothing rival Next as show in Figure 1 below. Figure 1. Projected revenues at Next and Marks & Spencer, 2012-16. (www.mintel.com . 2014) It is a old dog, learning new tricks, trying to stay ahead of the pack in terms of corporate social responsibilities, at which it seems to be succeeding. As it diversifies into the global market and attempts to knit Plan A in to every strand of its corporate fabric, it appears to be dropping a stitch here and there. It may be the case, that trying to implement Plan A it is focusing on too many avenues at any one time and distracting it from its core product. Marks & Spencer has been the market leader of retail in the UK for 130 years, based on good honest shopkeeping and that's why the British public has such affection for it. If Plan A was marketed better to the general public, through all media streams, it is the author's opinion it's endearment and revenue will only grow. In a world of finite resources, it should be making Plan A its main marketing ploy in the UK and around the world, showing that it is the most sustainable retailer in the world. References.D Grayson, (2011) "Embedding corporate responsibility and sustainability: Marks & Spencer", Journal of Management Development, Vol. 30 Iss: 10, pp.1017 – 1026corporate.marksandspencer.com (2012.) Available at:http://corporate.marksandspencer.com/documents/plan-a-our-approach/key-lessons-from-the-plana-business-case-september2012.pdf(Accessed on 19 October 2015.)forumforthefuture.org. (2014). Available at:https://www.forumforthefuture.org/blog/ms-plan-what’s-next-and-why-they’re-still-pioneers(Accessed on 2 November 2015.)fashion.telegraph.co.uk (2015). Available at:http://fashion.telegraph.co.uk/article/TMG9986043/Lack-of-focus-and-complex-branding-the-problems-blighting-MandS.html(Accessed on 3 November 2015.)marksandspencer.com (2015.) 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Available at:http://www.iso.org/iso/news.htm?refid=Ref1997(Accessed on 2 November 2015.)www.mintel.com . (2014) http://www.mintel.com/blog/retail-market-news/profits-at-next-poised-to-overtake-those-of-marks-spencer.(Accessed on 10 November 2015.)www.telegraph.co.uk. (2009). Available at: http://www.telegraph.co.uk/news/politics/5352040/Victory-for-Joanna-Lumley-as-all-Gurkhas-to-be-given-right-to-settle-in-Britain.html(Accessed on 3 November 2015.) | |