From Burberry to Bonmarché: six key themes in multichannel retailing

We’ve cast an eye over this week’s post-Christmas trading updates from IRUK Top500 ecommerce and multichannel retailers to pull out some key themes and trends, and how they driving multichannel strategies.

Online growth

Halfords , a Leading retailer in IRUK Top500 research, reported year-on-year online sales growth of 16.3% in the 15 weeks of its third quarter, to January 13. That’s ahead of the 11.4% rise in group revenue and 13.1% rise in retail sales over the same period.

Top50 retailer Pets at Home reported third quarter sales of £203,7m, 4.4% up on the same time last year and said that it had seen strong online sales. That, said chief executive Ian Kellett, reflected “the momentum gained from our investments in seamless shopping.” He said the pet supplies retailer would continue its focus on “becoming more specialist and doing the right thing for our customers”.

Some 70% of sales at home shopping group N Brown Group are now online, according to its third quarter trading update, while 77% of new customer demand comes via the internet. Online sales themselves were up by 12% at the business, home to brands including Simply Be, Jacomo and JD Williams, all Top250 retail brands, contrasting with overall group revenues that were up by 4.1% in the 18 weeks to December 31.

…or otherwise

Top150 retailer Bonmarché said it would focus on improving its online performance after reporting a 3.3% rise in sales in its third quarter, the 13 weeks to December 24, but a 3.8% fall in ecommerce sales. In the five weeks to December 24, total sales fell by 1.5% and online only sales by 14.3%, compared to the same time last year. Chief executive Helen Connolly said: “Given the backdrop of the current trading environment, our third quarter store sales were satisfactory, particularly in light of the business still being in the early stages of its turnaround. The online performance was poor, and this continues to be a key area of focus.”

The Brexit effect

Top250 retailer Burberry saw UK like-for-like growth leap by about 40% during its third quarter, to December 31, compared to the same time last year. It put this down to “growth from travelling luxury customers from all regions and from domestic customers”; there seems little doubt that the weakness of sterling is boosting UK sales at this luxury retailer. The figure contrasts with a group-wide 4% underlying growth in retail sales, which reached £735m during the period.

Mobile

Burberry said digital “outperformed in all regions,” with “significant” growth in mobile. New payment methods, it says, have helped to boost conversion.

Mobile devices accounted for 72% of traffic at N Brown Group websites, which include Simply Be and Jacamo. Smartphones accounted for 49% of all traffic – five percentage points more than a year ago – while smartphone conversion increased by 7% year-on-year. “Overall,” the company said in its third quarter trading update, “the significant increase in traffic from this device type, which naturally has a lower conversion rate, meant that the overall rate was slightly down, as expected.”

International

Burberry’s local Chinese website has seen recent improvements, and has seen strong growth as a result. Across channels, the retailer retail sales growth in the high single digits.

N Brown Group says its new USA website launched later than planned, in September, and affecting performance over peak, when revenue was down 3.5% year-on-year (or 19% on a constant currency basis). It said: “The site is performing well and we remain very confident in the market opportunity going forward.”

Black Friday

Game Digital chief executive Martyn Gibbs said it was pleased with performance in the peak weeks of Black Friday and Christmas, when gross transaction volumes, excluding hardware sales, were up by 2%, year-on-year. Overall, however, group gross transaction volumes were down by 1.6% in the three weeks to January 7, and down by 6.3% in the 23 weeks to January 7.

N Brown Group said a “record Cyber fortnight” drove its Christmas trading.

Strategic developments

Top100 trader Game Digital has launched new in-store gaming arenas to complement its online gaming facilities, and says that sales in new retail categories, including digital content and virtual reality headsets, were up by 31% over the 23 weeks to January 7.

Halfords has bought a minority stake in mobile tyre fitting service TyresOnTheDrive.com. This, it says, will give it the opportunity to trial a “broader mobile delivery proposition for its motoring services”. It also opened its first ‘store of the future’ concept store in Derby.

“We continue to make good progress implementing our Moving up a Gear strategy which will enable us to capitalise on the long-term growth opportunities in our markets,” said chief executive Jill McDonald.

N Brown Group chief executive Angela Spindler said: “We are benefitting from improved trading agility as a result of the transformational changes we have made.”