Marks & Spencer has suffered a "bruise" to its reputation after it was forced to stop taking online orders following a cyber attack, an analyst has said. The retail giant has paused orders on its website and apps since Friday as it attempts to restore operations. But analysts say M&S stands to lose out if the problem is not resolved quickly, with shoppers likely to turn to rival brands when buying summer clothes. Kate Hardcastle, consumer specialist at Insight with Passion, said the incident was "a bruise to M&S's trusted brand image". She said: "Customers expect a retailer like M&S to keep their data safe and services running, so an incident like this can shake confidence." However, she added that because M&S had responded quickly and been open with its communication the long-term damage should limited. "It's a setback, but with the right actions it can be just a bruise rather than a lasting scar." About a third of the retailer's clothing and household goods' sales in the UK come from its online operations. Natalie Berg, retail analyst at NBK Retail, said such incidents "erodes consumer trust in the brand". "I think shoppers are generally forgiving when these incidents occur, but they expect it to be resolved quickly." Customers began reporting problems last weekend - with people struggling to use contactless payments, click & collect, and gift cards - and on Tuesday the retailer confirmed it was facing a "cyber incident". Then on Friday M&S said it was pausing taking orders through its UK & Ireland websites and apps and some international websites. It apologised for the inconvenience and said it would refund orders placed by customers on Friday. M&S says contactless payments are now working and gift cards can be used. Online grocer Ocado, which sells M&S food on its platform, is unaffected by the problems as it runs on an entirely separate system. With warmer weather due this week, and shoppers turning their thoughts to summer, analysts said M&S could be missing out on sales at a critical time, as people were likely to turn to rival retailers to get what they want. "The turn in weather means shoppers will be thinking about refreshing their wardrobes and homes," said Ms Berg. "It's certainly not an ideal time to suspend online orders." Catherine Shuttleworth, from Savvy Marketing, said the online impact "is very quick and immediate". "Given the 'buy it now' culture other retailers will benefit from this opportunity." M&S's sales and profits have improved in recent years and it has been seeking to expand its online operations. Last year, out of £3.9bn of sales in its clothing and home business, nearly £1.3bn came online. In September, it said increasing the percentage of online sales was "a critical objective". Ms Berg said problems caused by the cyber attack were "an operational catastrophe". "M&S is firing on all cylinders today, but there's no doubt that this is a significant setback". Last week, a spokesperson from the Information Commissioner's Office told the BBC it was "assessing the information provided" after the retailer told it about the incident. The firm previously said on Tuesday it had reported the incident to the National Cyber Security Centre (NCSC), and the National Crime Agencytold the BBCit was working with the NCSC to support the firm. The retailer is the latest major brand to experience significant disruption to its online services in recent months. Morrisons faced huge problemswith its Christmas orders last year, whileBarclaysandLloydswere both hit by banking outages in the first two months of this year.
M&S online disruption a 'bruise' to reputation, analyst says
TruthLens AI Suggested Headline:
"Marks & Spencer Suspends Online Orders Following Cyber Attack"
Bbc News
8.7
TruthLens AI Summary
Marks & Spencer (M&S) has recently faced a significant disruption to its online operations due to a cyber attack, leading to the suspension of online orders across its website and mobile applications. This incident has raised concerns regarding the retailer's reputation, with analysts describing it as a 'bruise' to M&S's trusted brand image. Consumer specialist Kate Hardcastle emphasized that customers expect a high level of data security and service reliability from M&S, and such incidents can undermine consumer confidence. However, she noted that the company's prompt response and transparent communication could mitigate long-term damage. Approximately one-third of M&S's sales in clothing and household goods originate from online channels, making the timing of this disruption particularly concerning as summer approaches and shoppers look to refresh their wardrobes.
Retail analysts have highlighted that the current situation could lead to M&S losing customers to competitors if the online issues are not resolved swiftly. Customers began experiencing problems with contactless payments and other services over the weekend, prompting M&S to officially acknowledge a cyber incident on Tuesday. By Friday, the retailer announced the halt of online orders and expressed its commitment to refund customers affected by this disruption. While M&S has reinstated some online functionalities, the company is under pressure to quickly restore full services, especially as analysts predict that rival retailers may capitalize on this opportunity to attract M&S's customers. The retailer's sales and profits have shown improvement in recent years, and it has been focusing on expanding its online presence, with nearly one-third of its £3.9 billion clothing and home sales generated through digital channels last year. As M&S navigates this setback, the Information Commissioner's Office and the National Cyber Security Centre are involved in assessing the situation, following the company's reports about the cyber attack.
TruthLens AI Analysis
The article highlights the challenges faced by Marks & Spencer (M&S) following a cyber attack that disrupted its online operations. This incident has raised concerns regarding the retailer's reputation and its ability to maintain customer trust. Analysts are particularly focused on the implications of this disruption for M&S's sales, especially during a crucial shopping period for summer clothing.
Impact on Brand Reputation
The analyst's comments indicate that M&S's reputation has taken a hit due to the cyber attack. The term "bruise" suggests that while the incident is damaging, it may not result in permanent harm if handled properly. M&S's swift response and transparent communication are viewed as positive steps that could mitigate long-term damage. However, the expectation from consumers for retailers to safeguard their data and ensure consistent service highlights a critical aspect of modern retailing.
Consumer Trust and Expectations
Kate Hardcastle's insights emphasize that while consumers may be forgiving, they expect quick resolutions to such disruptions. The fact that a significant portion of M&S's clothing sales comes from online channels means that prolonged issues could prompt customers to seek alternatives from competitors. This situation underlines the fragile nature of consumer trust in the digital age.
Potential Consequences for Sales
With summer approaching, analysts speculate that M&S risks losing sales to rival brands if the cyber issues are not resolved promptly. This pressure is compounded by the fact that customers are increasingly turning to online shopping for convenience, especially during peak seasons. The interruption in M&S's online services could lead to a significant reduction in sales during a critical time.
Broader Implications for the Retail Sector
The article indicates potential ripple effects within the retail sector, as incidents like these can lead to increased scrutiny of cybersecurity measures across the industry. Furthermore, the mention of Ocado, which remains unaffected by the problems, suggests that partnerships and technological infrastructure are crucial in mitigating risks associated with cyber threats.
Market and Economic Considerations
This news could influence M&S's stock performance and has implications for investor confidence in the retail sector. The company's ability to recover from this incident will be closely monitored by investors and analysts alike. A swift recovery could bolster confidence, while prolonged issues may lead to a decline in stock value.
Target Audience and Community Response
The article likely resonates more with consumers who prioritize online shopping and are concerned about data security. It may also appeal to stakeholders within the retail industry, including investors, analysts, and competitors, who are keenly observing M&S's response to the crisis.
Connection to Global Trends
While the incident itself may not directly relate to broader geopolitical dynamics, it reflects the increasing prevalence of cyber threats in today's interconnected world. The rising frequency of such attacks underscores the need for robust cybersecurity measures, which could be a point of discussion in various forums, including economic and political contexts.
Considering the language and framing used in the article, it does not exhibit overtly manipulative tendencies, but rather presents a factual account of the incident while highlighting its implications. The urgency in addressing consumer trust and operational recovery indicates a focus on maintaining brand integrity.
In conclusion, the article presents a reliable overview of the challenges faced by Marks & Spencer, underlining the importance of swift action in preserving consumer trust and mitigating reputational damage.