**M&S Online Disruption: Analysts Assess Impact on Reputation**
Marks & Spencer (M&S) is grappling with significant reputational challenges following a cyber attack that forced the retail giant to suspend online orders. According to Kate Hardcastle, a consumer analyst at Insight with Passion, this incident represents a notable “bruise” to the brand’s trusted image. The cyber incident has resulted in the company pausing order capabilities on both its website and mobile applications, a decision that came into effect on Friday as it sought to manage the disruption and restore its operations.
The repercussions of this disruption are potentially severe, as analysts suggest that if the resolution isn’t expedient, M&S could lose a substantial customer base. Shoppers, particularly those seeking fashionable summer apparel, may increasingly turn to competing brands during this crucial shopping period. Hardcastle acknowledges that customers have heightened expectations from M&S, expecting robust online service and stringent data security measures. When these expectations aren’t met, as seen in this instance, consumer confidence might falter.
However, Hardcastle optimistically notes that M&S’s quick response and transparent communication could mitigate long-term damage. While she characterizes the situation as a setback, she believes it can remain a minor issue rather than causing irreversible harm to the brand’s reputation. Approximately one-third of M&S’s sales in clothing and household goods are attributed to online purchases, making the resolution of this issue imperative for maintaining their market share.
Adding to this perspective, Natalie Berg, a retail analyst at NBK Retail, points out that such incidents can significantly erode consumer trust in M&S, although she believes shoppers may be forgiving if resolutions are swift. Reports of operational challenges began surfacing last weekend, with customers experiencing issues related to contactless payments and gift card usage. By the following Tuesday, M&S formally acknowledged the situation as a “cyber incident.” On Friday, the company announced the suspension of online orders across its UK and Ireland platforms, as well as certain international websites, leading to a flurry of apologies and confirmations of refunds for affected customers.
It is noteworthy that M&S has reported successful transactions using contactless payment methods and gift cards. Meanwhile, the online grocery service Ocado, which stocks M&S food products, has been relatively unaffected by the disruption, as it operates independently on a separate system.
The timing of this disruption is particularly unfortunate, as analysts indicate that warmer weather is accompanying a shift in consumer purchasing behavior. During this period of seasonal transition, shoppers often seek to update their wardrobes, particularly in anticipation of summer. Berg emphasizes that halting online orders during such a pivotal time is far from ideal.
Catherine Shuttleworth from Savvy Marketing reinforces this sentiment, noting that the effects of the online disruption can be immediate. She warns that competitors might seize this opportunity to attract M&S customers who are eager to make purchases expediently.
Over the past few years, M&S has enjoyed a resurgence in both sales and profit, actively seeking to bolster its online operations. In 2022, the online sales figures for its clothing and home divisions accounted for a significant £1.3 billion out of a total of £3.9 billion in revenue. The company classifies enhancing its online sales percentage as a key priority going forward.
However, Berg has dubbed the disruption caused by the cyber attack an “operational catastrophe,” stating while M&S is currently performing well, the attack constitutes a substantial hurdle for the retail company. In a statement last week to the BBC, a spokesperson for the Information Commissioner’s Office revealed that they are evaluating the details provided regarding the incident. M&S has also communicated with the National Cyber Security Centre (NCSC) and is collaborating with the National Crime Agency to address the security breach.
M&S is not alone in facing such challenges; the incident underscores a broader trend of prominent brands experiencing severe online service disruptions. Competitors such as Morrisons faced major operational issues during Christmas, while financial institutions like Barclays and Lloyds dealt with their own service outages this year. This series of events highlights the increasing vulnerability of even the most established companies to cyber threats, making effective cybersecurity measures critical in today’s digital landscape.