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In-store tablets and online sales are driving growth at Dunelm, while stores remain ‘vital’

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Dunelm figures out this week highlight the contribution that online sales, working to support ’vital’ stores, are making to its business. The retailer, a Leading retailer in IRUK Top500 research, also said it was on track to launch a new web platform that will enable it to improve its delivery options and launch click and collect services. 

The online contribution so far this year

The homewares retailer showed sales growth of 4.2% on a like-for-like (LFL) basis that strips out the effect of store and business openings and closures in a first-quarter trading update for the 13 weeks to September 29. But total group sales, of £248.2m, were down by 0.1% on last time, including figures from the now-closed Worldstores, Achica and Kiddicare businesses. Those businesses have now been absorbed into Dunelm’s main website, with 20,000 product lines now transferred.

In-store sales grew by a respectable 1.3% LFL, year-on-year, to £206.6m. That growth came thanks to online in-store sales – made by assistants using tablets to help customers order for home delivery. Without them, store sales would have fallen by 0.4% LFL. 

Beyond the store, online sales grew by a third (33.3%) to £26.5m. If in-store tablet sales were included in this figure, it would have shown online growth of 50.8%. Overall, multichannel revenue – which includes sales made online, using the Dunelm Reserve & Collect service, and selling via in-store tablets, represented 14.8% of Dunelm’s continuing £244.2m (+5.8%) total revenue – that’s to say, not from the Worldstores, Achica and Kiddicare websites. Multichannel’s share of sales has grown by 3.9 percentage points since the same time last year. 

Looking ahead to new developments

Dunelm says it’s on track to lunch its new web platform in the third quarter of this year – between January and March 2019 – using technology gained via its 2016 acquisition of Worldstores. The new platform will mean it can now launch click and collect services, and more easily improve its delivery options in future.

The retailer, which currently has 169 stores, is committed to opening one more store this year, and says it is in discussions on opportunities to open more.

Stores, says Dunelm chief executive Nick Wilkinson, will continue to play an important role in the retailer’s multichannel service. “We continue to improve the multichannel experience for our customers and our stores play a vital role in this,” he said. “I am pleased at the progress we are making with tablet-based selling in store to offer our full product range to all our customers.

“Whilst we are cautious about the months ahead due to the level of market and customer uncertainty, I see plenty of opportunity over the medium term as we continue our journey to become the leading multichannel retailer in our sector, helping our customers create homes they love.”

Our view: Multichannel retailer Dunelm’s online investment is all about improving the service it offers in and beyond its stores – where around 85% of its sales still take place. Retail brands, it rightly recognises, must offer the convenience that online brings, while at the same time the touch and feel experience that stores offer. The upcoming launch of click and collect services will add to that: collection is a popular option among retailers of all stripes, and Dunelm will be expecting such a service to bring more traffic into its stores as well as boosting its online sales at the same time. 

Image courtesy of Dunelm

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