With millions of customers and a UK food revenue of £5.6bn accounting for 60% of M&S UK turnover, M&S places huge emphasis on great service to customers at the lowest cost to the business. Achieving this means better KPI’s performance for the business, increasing product availability, reducing waste and better stock management.
Hear how M&S use our weather and climate data to meet their KPI's, in our 4 minute video:
Find out how we can help you meet your KPIs call the Retail team on 0370 900 0100 or email email@example.com.
Sharing insights of our collaboration
On 9 November we delivered a joint presentation with M&S at the IGD Supply Chain Summit, an event that brought together hundreds of supply chain managers from some of the biggest consumer goods companies in the UK and around the world. The presentation premiered our video case study about our collaborative relationship. In the video, M&S highlights how working together has benefited their supply chain and, ultimately, their customers, and we explain how it has deepened our understanding of the market and ways of improving our capabilities.
Understanding consumer behaviour
M&S has a wide customer base with food stores in an array of locations from Foodhalls in high streets and out of town retail parks and though Simply Food franchise partnerships in railway stations and motorway services. Understanding the impact weather has on its customers is essential to ensuring each store meets customer needs, by offering the right products, at the right time.
The challenge of demand planning is something James Weston, Foods Commercial Manager at M&S Marble Arch store on Oxford Street, manages on a daily basis. With over 100,000 customers each week and stocking over 5,000 products, Marble Arch is the largest M&S Foodhall. Referring to the importance of stocking the right volume of products to avoid unnecessary waste, James says: “It is absolutely vital to ensure we are getting the right level of products because it has a lot more cost attached to it.”
The Met Office recently commissioned an independent research study, which surveyed over 240 supply chain senior managers and executives, and found that for 47% of respondents weather ranked as the third most important factor external to their business that drives consumer demand.
Weather forecasts are currently used to support a broad range of activities and decisions in supply chains. The most common application is the short-term sales forecasts, which drives much of the upstream planning and activities, so applying weather at the early stages of supply chain, is critical. Click to see our full report.
There is also a clear desire from supply chains to use the weather forecasts more broadly within their businesses to drive commercial benefits, for example through forecasting footfall, online traffic and planning marketing campaigns.
Working together to create bespoke services
On the surface, it might seem obvious that customers look for light food in warmer weather and hearty comfort food when it’s cold. But are people choosing fresh fruit and salads, or sandwiches? Soups, pasta dishes or pies? What about if it’s a warm day, but due to rain later? Or if it’s cool now, but there’s a heatwave expected at the weekend? When the weather’s as changeable as it is in the UK, planning around it starts to look a lot more challenging. For M&S, that means calling on more detailed information than a typical, day-to-day weather forecast.
“Working together with the Met Office, we’ve created specific models to help us predict and better understand what customers want to buy when the weather changes,” explains Andy Bowsher, Central Forecast and Inventory Manager at M&S.
This collaborative process began with our experts talking to M&S to find out more about their decision-making processes, how their supply chains work and what their key business drivers are. As Barbara Napiorkowska, Met Office Retail Business Manager, points out, “It’s vital we understand how a business operates, then we can understand how we can work together to provide the most appropriate services for them.”
For M&S, this includes a detailed weather briefing integrated into their daily demand planning process. “We start each day with a conference call where Met Office forecasters will talk us through the weather for the next seven days,” says Andy from M&S.
“We then discuss the likely impact the weather will have on planned product volumes that we already have in the system. This information is vital as it helps us make decisions about varying volumes and making changes to what we place out in stores.”
With timely advice, it’s possible to make changes to stock orders just one day in advance. Having this collaborative, reactive relationship in place means M&S can make their supply chain more efficient, reduce the amount of food thrown away and make sure customers can easily find the products they want.
An example of understanding the weather to increasing opportunity was during a recent cold spell where our meteorologist issued retail customers with a cold weather warning for regions of Scotland. This accurate data and high confidence in the forecast gave M&S the opportunity to increase orders on pie’s and soups along with other comfort foods, increasing on shelf availability and reducing waste by adjusting orders of other products.
The benefits of collaboration
Our timely and accurate data aids M&S decision making, to give customers a better shopping experience, “The forecasting system on a lot of the products is very reactive. Some of the departments can be affected within a 24 hour period, so for example if the weather overnight does decide to change it can affect the order for the next day”, explains James.
Retailers surveyed confirm this, with 81% of respondents stating a key benefit of weather data would be better on shelf availability.
Andy echoes the importance of Met Office expertise in supporting M&S product availability, reduction of waste and to enable better stock management. “Using the actuate data the Met Office provides us with, allows us to understand more comprehensively the impact of cool, warm and hot weather, the effect of sun hours and even how rain benefits some of our shopping centre stores. This clearer insight allows us to make more efficient decisions, more regularly and better place stock for our customers.”
What does the future hold for retailers?
With retailers growing in size, the importance of planning becomes increasingly clear. Our scientific capabilities are constantly developing to support customers with new solutions, such as longer-term weather forecasts, new technologies to provide predictive weather analytics and consultancy.