‘E-commerce has become the cuckoo in the business nest,’ said Laura Wade-Gery, director of multi-channel and e-commerce.
Marks & Spencer is promising huge improvements to the way it serves online shoppers after opening a fully automated 900,000 sq ft warehouse in Castle Donington on Wednesday that will be able to handle 1m orders a day.
The retailer, which sells just 15% of its clothing and homewares online, compared with about 35% at major rival Next, admitted that its current systems were ageing and inefficient.
Laura Wade-Gery, director of multi-channel and e-commerce, said: “E-commerce has become the cuckoo in the business nest.
“It has outgrown our business infrastructure. Our delivery proposition and availability is not as good as customers would like.”
Sales online have been increasing by 22%, but M&S is still behind competitors partly because its website is run with Amazon, which has restricted the UK store’s ability to sell overseas.
M&S has been building its own website, which will launch next year, and it hopes its new distribution centre in the Midlands will help ramp up sales.
After more than 20 years of under-investment, M&S is now aiming to launch a “market-leading proposition” in the way it delivers online purchases to shoppers, according to Wade-Gery. A first step will be an option, available within the next 12 months, to order goods late at night via its large stores for delivery the next day, before moving to same-day delivery.
The new warehouse will help make that happen by cutting by 70% the time it takes to move products from UK ports to stores and improving the availability of popular items both in stores and online.
The centre is currently handling just a few hundred orders a day, but by next year it will be dealing with 1m items daily, with 1,200 people working at the site during peak periods.
Marc Bolland, the chief executive, said: “We need to be agile and flexible as this world is changing.”
The company is in the middle of a £1bn programme to improve ageing IT and distribution systems that began life in 2009. The changes will also reduce the amount of stock the company needs to hold by a third and help it to cut costs by using just three distribution centres rather than more than 50 warehouses at present.
Analysts say M&S faces a risky period over the next few years as it builds the Castle Donington facility to full capacity, adds clothing to an existing centre in Bradford, and sets up a new distribution centre in the south-east.
The chain also has to urgently improveits clothing ranges as underlying sales of clothing and homewares have fallen for the last seven quarters.
Bolland, said he was feeling “confident” ahead of M&S’s launch of its key autumm/winter clothing ranges to the fashion press next week.
He denied that M&S was losing key staff, despite the departure of Janie Schaffer, head of lingerie and beauty, after just three months in the business, and the exit of two other senior womenswear executives in recent weeks. The company announced yesterday that it had swiftly hired a replacement for Shaffer – recruiting Jo Jenkins, currently product director of womenswear at Next.