New Delhi:James Munson, who took over as managing director of Marks and Spencer Reliance India Pvt. Ltd in May, has come back to the country after nearly four years and is quick to notice changes in fashion trends. In 2011, when he was the marketing head in India, the company struggled to sell women’s shorts. Now there’s a surge in demand and Munson is all set to take the British retailer’s business to the next level with low-priced products and new stores in India.
Marks and Spencer Group Plc. (M&S), which has a joint venture with Reliance Retail Ltd, has the highest number of stores in India—62—outside of the UK. The retailer also sells the M&S brand across three online marketplaces—Myntra, AJIO and Amazon.
Thirty-nine-year-old Munson has been working with M&S since 2006 in different roles and has over 20 years of experience in the retail industry, including six in India and the Czech region.
In an interview, he spoke about the new store formats and growth strategy. Edited excerpts:
How has the Indian market changed since your earlier stint here?
India is coming in line with international fashion trends. When I started in 2011, ladies’ shorts was an area where we really struggled but now, we are getting a lot of traction there. So, there is an alignment of fashion. There is no doubt that in India, there is a greater demand for colour and print. We make sure with our local sourcing that we get additional colour and print into our stores here.
From a business perspective, India is increasingly becoming a competitive market, which is good for us as well as the consumers. The malls have professionalized in terms of investments. However, there are some things that still haven’t changed...getting a quality real estate is still very difficult.
How and what did India shop for in 2017?
We see Indian customers increasingly follow global trends. For example, we’ve recorded a 62% increase in the sale of dresses since last year as well as a 25% increase in swimwear sales during 2017. Customers have brought into trends and key pieces such as the statement sleeves, embroidered detailing and patches across dresses.
Has there been a change in M&S prices recently?
It will be wrong to say that there has been a fundamental shift in our prices, but we are focusing on getting our opening price points right to give the customer value for money. We are pushing these value credentials in segments where we have real authority, like lingerie. Bras are growing at a rate of 31% year-on-year and this year, we introduced a starting range of bras at Rs799, which was Rs1,299 last year. We have sold 86,000 units of that range so far this year.
We introduced a range of Rs999 (earlier Rs1,299) in men’s polo t-shirts, which is starting to get traction. We have also introduced a ladies dresses line at Rs1,999, which has done phenomenally well. There is exponential growth in dresses.
What led to this marginal shift in prices?
It’s a combination of reviewing as to where we sit in the market, our ability to make sure that we have a very strong local sourcing base and that we are able to drive real value to our customers. Today, about 65% of what we source for our business comes from India, Sri Lanka and Bangladesh; 30% of our sourcing is directly from India itself.
This gives us the benefit on supply chain and allows us to pass that benefit onto the customers. But it’s not just about prices. It’s a combination of making sure that we are offering regular fashion in our stores at a price point that is compelling.
Has M&S reduced store sizes in India?
Over the years, we have gone through variations in our store sizes and now, we are clear as to what the right size should be. Our latest store is 12,500 sq. ft (in Mumbai) and it seems like a sensible size for tier-I locations.
Again, there is no fundamental shift but we have rationalized a few stores (two or three out of 62) to align these with the markets where we operate in. In the new markets, store sizes will depend on the availability of real estate. We have significant learnings from our current stores and we know what store size works where.
How big is your winter collection, given that the season is down to just two months?
In the north, winter wear accounts for 40% of our overall turnover. It’s an area where we have some real differentiators against our competitors. So far, there has been no significant shift in the trend with climate change. It’s colder this year, which is playing into our strengths.
You had introduced a separate lingerie and beauty store format. How has that worked out for the brand?
For us, it is not a way to enter markets but to support our full-line stores. We have six independent beauty and lingerie stores and these are performing well. It’s all about making sure that we have the right location. Lingerie is a key opportunity as we move forward. We launched this format because lingerie is our strength and these stores help us get to a wider audience. With this format, we are able to make lingerie more accessible for the consumers.
How quickly is India growing?
Our growth rates have been strong. Last year, we delivered 10% like-for-like growth. We are having a strong year despite the impact of GST (goods and services tax). Last year, we did Rs880 crore (2016-17) and we recorded 16% overall growth. India continues to be a strategic and important market for M&S. We are cutting a decent path for us through the market.
Which are your strongest markets?
Delhi and Mumbai are clearly our biggest contributors. We have 24 stores in tier-II cities, which contribute a fifth of our revenue, but their rate of growth is much stronger than the business average. The bigger markets are high business contributors but growth rates are stronger in tier-II.
What are the expansion plans for India?
One thing that I have learned so far is that it is very difficult to define targets in India because there are a number of factors that play in the probability of delivering those targets. For example, store number is clearly defined by the probability to attract quality space. We are committed to grow the business here and concentrating on store expansion. We did eight stores this year and we want to continue at the same pace, if not higher.
What kind of shopping trends are you looking at for 2018?
For 2018, we’re continuing to follow global trends with contemporary design and fashionable styling. This includes must-haves from wrap dresses to shirt dresses with detailed finishings and botanical print styles. We’re also continuing to offer customers colourful linen they love in fashionable styles with bardot and kimono shapes through to everyday shorts that can be dressed up or down.
Who is an average M&S consumer?
Our average customer is around early 30 years of age or mid-thirties, female, often working, well-travelled and internationally aware.
Where do you shop?
I wear Marks and Spencer a lot, both formal and casual; I also shop for a number of different brands but I am not loyal to any brand, except M&S.
What is your personal style?
I am formal most of the week and over the weekend, I am just like everybody else.