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Halfords sales rise as it puts stores at the centre of its business

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Halfords sales rise as it puts stores at the centre of its business
Halfords sales rise as it puts stores at the centre of its business
Halfords showed the importance of stores to its business as it unveiled rising sales both online and offline.

Total group revenue came in at £588.7m in the six months to September 29, up by 3.8% on the same time last year, while online sales were up by 10.8%, with 85% of online orders picked up in store. But underlying pre-tax profits of £36.8m down down by £4m, or 9.8%, year-on-year. After one-off costs, related to a review of its autocentres, bottom-line pre-tax profits stood at £36.6m, down by 6.4% on last time.

Jonny Mason, chief financial officer and interim chief executive, said: "We have delivered more improvements for our customers in this first half, with new services for motorists and cyclists, provided by trained, friendly, expert colleagues, and new ranges of great products. It is pleasing to report positive sales growth for this period, despite the poorer summer weather and the uncertainty in the UK economy.

"We are also pleased with our profit performance in the half, as we offset a large part of the c.£15m increase in costs that resulted from the impact of the weaker pound. Looking ahead, we have strong plans both in-store and online for the Cyber, Christmas and winter peaks."

Here's what Halfords, a Leading retailer in IRUK Top500 research, said about its multichannel strategy.

Getting to know the customer through data



The retailer is developing a single view of its customer transaction, and said that during the half year it matched 54% of retail transactions to the customer who made them. That's up from 3% two years ago. Across the group, which includes autocentre sales alongside retail sales, the match rate came in at 67%. Halfords said its tools in achieving this included eReceipts, tokenisation and improved data matching across 21 different data sources within the group. Over the two years it collected 6.5m email addresses in retail stores.

It uses the data to learn about its customers, of whom 10,000 a week respond to its "Give us a steer survey" which operates alongside brand research with the aim of giving "a more complete view of our customers, so we can become more relevant in their lives." Halfords is also testing personalised web experiences, so a customer who clicks through to its website from an email will see different products, depending on their browsing and buying preferences. This has paid off, it says, through an extra 1.5m visits to the website, which have brought extra sales. "Communicating in a more relevant and targeted way with the right product and at the right time is driving increased frequency of interaction between us and our customers," it said. It now sends more than 25 different automated emails to its opted-in customers, and says it can infer upcoming milestones in a customer's life, in areas from child car seats to bikes.

Focus on the store



Halfords' strategy of offering its customers services in store helped to bring people into its shops, and to lift sales at the same time. In the six month period, staff carried out some 2m fitting and repair jobs on cars and bikes. At the same time, service-related retail sales grew by 19.3%. More than a third (37%) of the bulbs, batteries and blades that it sold were fitted by staff to customers' cars. This, it said, reflected "the increasing relevance of our services proposition to the growing proportion of do-it-for-me customers," with dash cam fitting and cycle repairs also an important part of the business.

Online also proved a useful channel to bring customers into the store: 85% of Halfords.com orders were collected from shops, via click and collect services. "The importance of our store network and service overlay continued to be highlighted by the strength of click & collect, with around 85% of Halfords Retail online orders picked up in store," the retailer said in the half-year statement. "This high proportion of click and collect continues to differentiate us from other retailers; our online business, instead of cannibalising our bricks and mortar operation, has driven footfall into our stores, with over 80% of customers wanting advice or fitting service with their purchase."

Staff have all been given headsets that enable staff in the store to get more information through short conversations. The headsets, it says, have also driven improvements in efficiency as less time is spent looking for people with keys or tools for fitting services.

Halfords is also updating its stores and is testing a 'light' or high street version for potential use in stores that don't justify a full update.

Promotions



The retailer said that it moved away from promotions in its cycling business. While it sold fewer bicycles than it had the year before, when it held a "deep promotion", that drop in volume was "more than offset by the increase in average selling prices".
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