Next CEO: Marketing spend is ‘not a decision made in the boardroom’

Posted On Oct 15, 2022

With the cost of living crisis dampening consumer demand, sales during August slowed “significantly” and were “below our expectations”, the retailer has said.

Next is taking a flexible approach to marketing spend as inflationary and cost of living pressures take their toll, with CEO Lord Simon Wolfson promising to adjust spend in line with return on investment (ROI).

“How much we spend on marketing isn’t a decision that’s made in the boardroom,” Wolfson told Marketing Week during a press briefing today"

“It’s a campaign-by-campaign decision where we’re constantly monitoring the returns we make on marketing and deciding whether to invest more or less going forward.”

The business typically aims to make £1.50 on every £1 spent on marketing, he said.

“If things get tough, then what you’ll find is the return on advertising falls and therefore we will cut marketing,” Wolfson added. On the other hand, if the cost of the retailer’s marketing drops and its ROI increases, it will choose to up investment once again.

Next will continue to invest almost exclusively into digital and direct marketing channels and to do “very little” brand marketing, a strategy the retailer kicked off in 2018 when it announced plans to more than double its digital advertising spend while cutting investment in print, TV and direct mail by 50%. Since then, the shift towards digital marketing has gradually increased, and Wolfson today confirmed the business is still seeing “incremental sales and profit” from its digital marketing efforts.

However, Next is not looking to make any further cuts to the brand spend it does currently make, Wolfson said.

Original Post: Next CEO: Marketing spend is ‘not a decision made in the boardroom