The size of the challenge

The big news in UK retailing last week was the announcement of a new CEO for Marks and Spencer. After months of speculation, the company unveiled their choice for this crucial position to be Marc Bolland, the former Heineken COO and then saviour of UK food retailer, Morrison’s. A surprise on the one hand - his name hadn’t been one of the many being publically aired - but then not a surprise in that Marc Bolland has quickly established himself to be a dynamic and charismatic operator who can effect quick change.

The developments at M&S will be eagerly followed in the UK, but the issues they raise would seem to be a good representation of issues that many retailers around the world are facing. Firstly there was the issue of succession planning. The current executive chairman, Sir Stuart Rose, had been open in stating that he was looking to internal candidates to fill the chief executive’s position and held a public “beauty parade” for the 3 M&S executives who each presented their plans to financial analysts. They clearly failed to impress which has to be worrying in a business the size of Marks and Spencer that it isn’t able to nurture its own future leaders. It would be difficult to imagine that Wal-mart or Tesco could countenance recruiting their future leaders from outside of the company and its DNA.

The second interesting issue is that Marc Bolland represents that small but growing group of retail CEOs who have been recruited from outside of the traditional retail sector. This is a hotly debated topic across retailing - can a non-retailer run a retail business? Increasingly, the evidence would suggest that they can. What retailers should perhaps be examining are the reasons why. If non-retail executives bring a better understanding of consumers, or a new approach to marketing, pricing or promotions or the online world, then these issues won’t go away and retail businesses need to be nuturing a new skills set.

And the final big issue the Marks and Spencer appointment raises is around how Marc Bolland will employ his demonstrable marketing and branding skills to reinvigorate the brand values of a major retailer such as M&S. It would seem to encapsulate the dilemma faced by many retailers in this current market - how to serve the needs of value-driven consumers if your brand exists to serve aspirational needs. For a retailer such as M&S that has built its brand on quality at premium prices, the shock of the new retail environment has seen it slow to react in presenting the same quality but at value prices. It is a trick that Marc Bolland has been able to pull off within the Morrison’s brand. All eyes will be on him - across the world - to see how he approaches this challenge facing one of the UK’s greatest retail brands.

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