Marks & Spencer online disruption a ‘bruise’ to reputation, analyst says

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 Agency told the BBC it 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 problems with its Christmas orders last year, while Barclays and Lloyds were both hit by banking outages in the first two months of this year.