Halfords invests in multichannel following a year of falling profits
Halfords is to invest in its multichannel services as part of a strategy to focus on sales of equipment for motoring, cycling and ‘great getaways’ after a year in which its profits have fallen by more than a quarter.
The motoring-to-cycling retailer has appointed a digital director, Clive West, who will be responsible for “all aspects” of the company’s online service, from the website to deliveries. Chief executive David Wild said in the company’s full-year results today that: “Our commitment is to be a true multichannel retailer, so that we seamlessly integrate our web offer with our in-store experience.
“Our development work is aimed to join together all aspects of the shopping trip and to leverage within that the growing power and use of the web as part of it. Enhancing our online offer and further extending our multichannel presence is an investment priority.”
He said that while online sales at Halfords.com were “less buoyant” during the year, mobile traffic and sales had grown quickly to around 10% of its online sales. Online sales accounted for around 9% of Halfords’ retail revenues. Innovations during the year included QR codes at the point of sale, with barcodes linked to rich content such as video and product information, as well as the introduction of the Halfords App, which received more than 370,000 visits during the period.
Halfords’ business lent itself to multichannel, said Wild, with further advice, a demonstration or fitting often required. Some 86% of Halfords.com sales are reserved and collected online, and can now be collected the next day from their local store if reserved online by 6pm. Delivery to home accounts for just 14% of online sales.
Online is also helping to boost the business of Halfords Autocentres, with 25% of all bookings now made online, and 7% originating from the Halfords.com website. Online tyre sales were up by 170% in the year.
The store must also be part of the seamless multichannel service, Wild said, as he cited the opening of three ‘laboratory stores’. “The nature of the shopping trip is changing as customers combine online shopping, stock checking and research with more traditional store visits. At Halfords, our stores must also facilitate our fitting and cycle repair services. Stores in the future will need to combine all these elements to provide a seamless experience.
“To test ideas that could provide future solutions and an enhanced shopping experience for our customers we have opened three laboratory stores. These will be used to test concepts and, if successful, it may be appropriate to include some of these concepts in future store designs. In the meantime our store refresh programme is on hold pending the feedback from the laboratory stores.”
The news came as Halfords today reported a 0.8% dip in total revenues, falling to £863.1m in the year to March 30, from £869.7m at the same time last year. Sales in the UK and Republic of Ireland fell by 2.3% to £752.3m from £769.7m. Retail revenues came in at £752.3m, down by 2.7% on a like-for-like basis, stripping out the effect of store openings and closures. Pre-tax profits, before one-off costs, fell by 26.6% to £92.2m, from £125.6m last year.
Wild said: “In a challenging consumer environment we have made good progress in our key growth areas of leisure, including cycles, fitting services and autocentres. Our success in these categories and our detailed market research demonstrates how customers appreciate the help and value we offer and our opportunity for further growth.
“As a result we are evolving our strategy to focus on three strategic pillars so that we become the Friend of the Motorist, the Best Cycle Shop in Town and the Starting Point for Great Getaways.
“We are investing in these opportunities, specifically in fitting resources, increased marketing and enhancing our multichannel offer. This will accelerate the evolution of Halfords from a traditional retailer to a contemporary solutions provider, will contribute to future growth and create up to 1,000 new jobs.”
Focusing on the cycle market, which says is currently estimated at £1.4bn, Halfords said said that while it was the biggest provider of cycles in the UK market, “at a local level and online we are not necessarily the best cycle shop in every town. This must be our aspiration.”