Both Inditex and Dunelm have reported significantly boosted results for 2022 – the former for the half year, the later full-year – and they both show just how more omni-channel retail has become post-pandemic.
Inditex, which saw sales up 25% to a whopping £12.8bn, with profits hitting a record £7.4bn, generated most of this through store sales and has, in fact, spent the past year concentrating on opening new physical stores worldwide across it range of brands. The retailer is very much of the view that this is where consumers want to shop.
At Dunelm the picture is similar. Its sales rose 16% year-on-year, hitting £1.55bn, with profits rising an impressive 34% to £209m. 65% of this took place in stores.
This shift back to physical retail is one that was probably inevitable to some degree, but many retailers are surprised that shoppers have returned to store shopping with such alacrity. The distant days of being forced to shop online are well and truly over.
Except they are not. Dunelm today sees 35% of its sales taking place online; a figure that is growing and which is more than double what it was experiencing pre-pandemic in 2019. At Inditex, while the focus has been on stores, online has continued to grow, rising 11% compared to the half year in 2021 and, says the company, on target to hit “at least” 30% of total sales by 2024.
The switch back to store shopping may be a larger swing than people were expecting, however online is still much stronger than it was before Covid.
What has changed is that online and store retail are much more tightly entwined in consumer shopping habits. They aren’t seen as an either/or anymore, but rather complimentary ways to browse, seek inspiration, buy and return. They work together.
This is exemplified by Budgens, which has opened a state-of-the-art Scan, Pay, Go store in London to bring the ease of contactless shopping to convenience grocery in what it says is the “most technological advanced grocery store in London”. Here the Budgens app, which is famed for being able to guide shoppers round the store based on their shopping list, is now also allowing shoppers to be pointed at inflation-busting special offers, items with lower environmental impact and even those products that meet specific dietary requirements.
Budgens is not only demonstrating just how entwined physical and digital shopping can be, but is also driving the beginnings of retailers helping out with the cost of living crisis.
The impact of this is starting to be felt by many retailers as shoppers start to look to shop more circumspectly, hunting out bargains and discounts and, with some sectors, cutting back on purchases altogether.
While the results posted by Dunelm and Inditex show just how good things have been, they don’t yet offer any insight in to what is to come. Both nod towards headwinds, but are both buoyed by the sales they have so far seen in September. How this now plays out across the run up to Christmas is, by one’s measure, a guess. It looks likely that shoppers will start shopping for Christmas early, they will look for bargains – expect a booming Black Friday – and then may tail off until there is a last minute surge just before the big day. It may not, in fact, be that different from other years. Where the pain will come is in the New Year, but there is still much that can change between now and then.
One place to understand what may be in store is at the first ChannelX World, taking place on October 13 in London. The new event offers retailers, brands and marketplaces a timely chance to explore the vital new channels that customers today want to buy through – from marketplaces, to social media and, looking to the future, the metaverse.
Speakers hail from an array of brands including M&S, LK Bennett, Amazon, Debenhams, Boohoo, eBay, TikTok and many more. Click here to find out more and to register for the event.