Friday, 30 April 2010

The new world of Marks and Spencer retailing

I bought a pack of canned draught Guinness in a supermarket this week. Not, I grant you, earth-shattering information usually worthy of sharing with the world. Except when I tell you that the supermarket was a Marks and Spencer food store. M&S is one of the most interesting brand case studies around because, almost uniquely amongst retailers, they only ever in the past sold products under their own brand names. So until recently had I bought a Guinness-type beverage in an M&S shop it would have been rebranded something like “M&S Irish Stout” and there would have been no mention of Guinness (or Murphy’s etc.) anywhere on the bottle or can.

Marks and Spencer built up their market position with a clear and uncomplicated approach to branding – everything in their shops carried the “Marks and Spencer” parent brand and the “St Michael” sub-brand. It was a slightly curious and certainly individualistic brand positioning, but for a hundred years or more it worked well. Things began to change when designer clothing brands became so popular in the High Street and M&S and St Michael started to lose out – notwithstanding the quality of their products. For clothing Marks and Spencer introduced their own proprietary brand names (like “Blue Harbour” and “Per Una”), dropped the outdated “St Michael” completely and tried with some success to compete with the distinctive high street brands like Next. But for their increasingly important food shops everything stayed M&S branded – until now.

Marks and Spencer food stores are gradually introducing famous name food products in these products normal packaging and without any attempt to distinguish (for example) the Marmite in M&S from the Marmite in Tesco just down the road. The logic is clear. If Marmite, or Kellogg’s or Guinness have spent decades building up brand value in their products, and if they support these brands with extensive adverting and promotion, then Marks, as another retailer, can surely have a share of the cake. Why not? And there are good consumer-driven reasons, as well as cost advantages, for this policy as well. As a consumer I know what I will get with Marmite – whereas “Marks and Spencer’s Yeast Extract” would be an unknown quantity! And surely M&S can source the real Marmite rather more cost effectively than if they had to commission a manufacturer to make a similar product for them.

For Roadside Retail there are some talking points arising out of M&S’s new strategy. One of the most interesting is to speculate whether the current imperative by which an Oil company (BP in the M&S case) will continue to be the parent brand on a petrol station with the M&S food store being the franchise brand on a BP site. Why not the other way round? Under this different model Marks and Spencer would own the sites and it would be the M&S brand that would be dominant throughout the site and of course in the roadside signalisation and branding. Then M&S, just as they now do with Marmite and Guinness in the shop, would retail BP branded products (mainly fuel and lubricants) on their forecourts – with appropriate branding and signage.

The attraction of this approach is that as income streams are increasingly from the shop rather than the forecourt the M&S brand would confer on the site a quality retail endorsement. But instead of selling their own branded petrol (as Tesco and Sainsbury's do) they would sell BP petrol – a perceived premium product with a whole serious of potential reasons to believe in it attached. And, just as they do in a food store with a branded food product, M&S would benefit from whatever advertising and promotion BP does for its own branded network and product range as well as from BP’s proud history.

Paddy Briggs April 2010
© Minale Tattersfield
Post a Comment