Shop Direct and Hotel Chocolat both focused on the importance of mobile in Christmas trading updates this week. Other key themes included personalisation and insights into customers’ spending patterns. Here are the key points that caught our eye.
Strong sales growth
Overall sales growth at Shop Direct [IRDX RSDG] grew by 9% in the seven weeks to December 23, compared to the previous year, when sales in the equivalent period were up by 6%. Black Friday week saw sales up by 4%.
Its flagship site, Very.co.uk, saw sales up by 19% over the period.
At multichannel retailer Hotel Chocolat [IRDX RHCH], a Top250 business in IRUK Top500 research, revenue grew by 16.2% in the 13 weeks to December 25. It said the growth came as more shoppers visited its store, bought more, and more expensive gifts in the run up to Christmas. It said there was “similar momentum” in its digital business.
Hotel Chocolat has prioritised smartphone and tablet optimisation in its new website, launched this month. It has also launched a bespoke ‘gift creator’ service for delivered gifts, and says it has better integrated the tasting club subscription service.
Mobile traffic to Shop Direct sites, which include Very.co.uk [IRDX RVER], ranked Top100 in IRUK Top500 research, and Littlewoods.com [IRDX RLIW], a Top100 retail brand, grew by 30% year-on-year.
At Very.co.uk [IRDX RVER], 70% of online sales were made via mobile devices – and 55% via smartphone alone. Mobile sales were up by 29% year-on-year, overall, and smartphone sales by 45%.
Shop Direct put that growth down in part to its mobile strategy. One example of that was Littlewoods’ iOS app, which launched in early November. It also used Canvas mobile ad technology from Facebook to offer deals to new and existing customers via social media.
Shop Direct also says that mobile growth was driven by a focus on personalisation. Its 2016 work on personalisation included the launch of the Very Assistant – an in-app conversational user interface (CUI) – and work to personalise its homepage during Black Friday week. During the week, it used insights into customers’ browsing and purchasing histories to show them their favourite product categories.
Shop Direct predicts that in 2017, artificial intelligence (AI) will “super-charge” personalisation as it works with IBM Watson to introduced an AI-driven CUI platform. It says its fully automated customer management engine will “draw on the power of AI and machine learning to automatically intervene in individual customer journeys at the right time, in the right way, with the right offer – whether it be via email, push notification or on-site communication”.
AI will also be used to make decisions on credit for customers – 94% of purchases over the Christmas period were made using credit to spread the cost.
More than a quarter (1.8m) of the total 6.9m parcels delivered by Shop Direct were picked up from Collect+ locations. That means a 20% increase, year-on-year, in click and collect, which is striking for a pureplay business with no stores of its own.
What they said
Shop Direct chief executive Alex Baldock said: “Shoppers chose convenience; being able to shop via smartphone was top of their Christmas lists. Most of the growth in retail is coming from online, and the growth in online is coming from mobile. We continue to put mobile first – and it paid off this Christmas.
“Our customers don’t want to feel like one of the crowd; they expect a unique experience. It’s what we gave them before, during and after they shopped this Christmas. Now, we’re using the power of AI to take personalisation to the next level.
“Personal shoppers shouldn’t be the preserve of just a few, or for just special occasions. Over the coming year, we intend to start democratising this service, like we have with famous brands through our credit offering.
“Etailers have already overtaken stores when it comes to convenience. Now AI-fuelled technology like chatbots and virtual reality has the potential to leave bricks and mortar behind in offering the best personal service. We believe it’s the next big shift in retail and financial services, and we plan to be at the vanguard.
“We know the market will be tough in 2017; we’ve still got a lot of work to do and we’re nowhere near the full potential of this business. But we’re confident that by continuing to invest in what makes us special, we’ll deliver another record year of sales and profit in 2017.”
• Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, said: “The growing strength of the Hotel Chocolat brand has enabled us to perform well. Our seasonal ranges included many new innovations and our cafe drinks offer adds a new dimension to our experience.
“Being a UK manufacturer gave us the flexibility to maintain good stock availability right up to the end of the season. I would like to thank the whole team for their energy, enthusiasm and tireless commitment to delivering on our plans.”
Mentioned in this piece…
Hotel Chocolat is a British chocolatier that encompasses a new type of chocolate company, connecting luxury chocolate making and retailing with cocoa growing – it is one of the world’s few chocolate makers to actually grow cocoa. Hotel Chocolat remains a privately owned company with the original co-founders still very much involved
The Business grew from an award-winning website to the launch of our first retail store in 2004. (more…)
- Shop Direct Group