M&S will ‘need to go on a charm offensive’ to win customers back
Analysts have warned that Marks and Spencer (M&S) faces an uphill battle to win back customers when it has dealt with its ongoing cyber attack.
The high street darling told markets it had suffered a “cyber incident” at the end of April.
Around £1bn has been wiped off its market value since 1 April, and it is estimated to be losing around £1m a day in sales.
The company said it has been working “day and night” to resolve the issue, although online sales remained down as of 8 May.
“Companies in this situation will typically find a solution and in the long term it will be business as usual,” AJ Bell analyst Dan Coatsworth said.
“Shorter-term, there is a major risk that shoppers lose trust in the brand. Marks & Spencer will need to go on a charm offensive to win back customers and get them to believe in the business again.”
Cyber experts have warned on the effects of eroded consumer trust after a cyber attack, particularly with regards to payments data.
Organisations take an average of seven and a half months to fully recover from a cyber incident, 25 per cent longer than they originally expected, according to cloud computing company Fastly.
“Retailers operate in such high-pressure, low-margin environments, where sustained downtimes can have a disproportionate impact on customer retention and revenue,” Fastly’s information security officer Marshall Erwin said.
“Brands like M&S and Harrods carry significant legacy systems alongside high customer expectations, which only makes recovery harder.”
“Cyber resilience must be treated as a long-term business priority, not just a technology concern… failure to do so risks turning a cyber event into a prolonged business crisis,” he added.