Jon Wragg, ecommerce and marketing director at Superdry spoke to Emma Herrod about performance in 2015 and plans for the coming year.
For Superdry owner SuperGroup , 2015 was a year of change and growth; it started trading well online at Christmas 2014 and it continues to trade well, according to Jon Wragg, ecommerce and marketing director at Superdry, which is a Model retailer in the IRUK Top500. As the interim results for first half trading to October 24 showed, reported in December, online accounted for 19.2% of total sales, up from 13.9% the previous year. “Commercially, what we’re doing is going well,” says Wragg. Group revenue was up 22.3% to £254.7m, compared to £208.2m in H1 2015. Retail revenue is up 30.8% and wholesale revenue increased by 7.8% to £82.6m. Underlying group gross margin is also up 110bps to 60.1%.
Change within the business centred on three or four things in 2015: iPad kiosks; warehousing; usability and product innovations.
iPad minis with Chip and Pin payment functionality have been rolled out to virtually every store owned by the company in Europe following successful trials in the UK. “They’ve become part of store culture now rather than something new,” says Wragg.
As well as being able to show customers the extended range that isn’t held in a particular store, the devices really come into their own with out-of-stocks enabling store colleagues to order an item for a customer to pick up from 12 noon the next day or have it delivered free to their home. Sales are credited to the individual store giving staff the motivation to get behind the iPad.
A second major change for the business in 2015 was the move to a single pick face for ecommerce and stores. Previously, all stock was held in a single building but separate pick faces for retail and ecommerce meant a two stage operation for order fulfilment – first stock was picked from retail into ecommerce and then picked for individual orders. “Now the depth of stock is enormous for ecommerce,” says Wragg since ecommerce effectively has access to the company’s global stock since the warehouse holds stock also for all international orders which are fulfilled from the UK too.
It was a 12-month process, he explains, with the RedPrarie warehouse management solution continuing to be used and interfaced to the company’s own systems.
Expanding further on the level of international business, he explains that the UK accounts for half of the company’s total business with the ratio of ecommerce sales at a similar level. “We don’t skimp on service, he says of customers’ fulfilment options with orders to all of the US states, except for Hawaii, arriving in 48 hours and Australia reached in 3 days. Localised returns points are offered so that customers don’t have to pay expensive international rates. One option for returned products is that they are sold by the stores in that particular country.
2016 will see the company continuing its expansion through store openings with the majority planned for Europe – with particular focus on France and Germany.
The third change, Wragg mentions is the improvement to the customer experience through the site’s journey of blended adaptive and responsive design. He points out that it is still on the journey.
A lot of usability changes have come out of the company’s use of customer experience analytics tool Sessioncam which allows SuperGroup to observe customers on the website, where their mouse is going, the journey they are following and then aggregate the data into reports. This can show them the paths that customers who see an error on the payment page, for example, have followed and enable them to then make changes to improve the experience. “It’s an ongoing project,” says Wragg and one which is used in conjunction with other forms of user testing and analytics to get a fuller picture through which to improve the experience.
“The final thing for 2015 is some fantastic product launches,” he says citing the collaboration with actor Idris Elba and the launch of Superdry sportwear.
Talking about plans for 2016, he said that he is looking forward to 2016. Superdry will be growing through 4 pillars of customer marketing, product innovation, UX and fulfilment. Wragg explains that the ROI of digital marketing is understood and it now allows the company to invest in new areas where the immediate result is not clear but will continue to build the brand.
2016 will see new areas of product innovation and the “mobile site will get better and better”.
The biggest difference for Superdry will be in the fulfilment piece; “how it works to make it even better, more immediate and local”. There may be services, such as gift wrapping, added too or some of the fulfilment around the world could be localised, explains Wragg but the aim is to keep making it easier for customers.
“We have no shortage of ideas,” he says.
SuperGroup’s European store roll-out programme is yielding results. Reporting results for the 11-week period from 25 October to 9 January 2016, the company said that retail revenues increased by 14.6% year-on-year reflecting the positive impact of the new stores including four in Germany. Total retail sales for the 11 weeks came in at £143.5m a like-for-like increase of 1.2% and thus maintain the sales momentum achieved in the first half of the financial year. On a two year basis this represents like-for-like growth of 13.7%.
Euan Sutherland, Chief Executive Officer, said: “Having made further good progress through our peak trading period our focus remains on delivering our strategic plan to create a global lifestyle brand. This encompasses the continued extension of the Superdry brand and the execution of clear global retail growth opportunities, under-pinned by ongoing investment to strengthen the business.
“With a positive customer reaction to our latest product developments, a strong pipeline for new stores in our targeted European markets and established momentum in ecommerce, the board remains confident in delivering underlying profit before tax for the full year in line with analyst expectations and in the brand’s continued long-term growth.”