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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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John Lewis, M&S, Debenhams, Argos, Mothercare and more: multichannel update

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John Lewis, M&S, Debenhams, Argos, Mothercare and more: multichannel update
John Lewis, M&S, Debenhams, Argos, Mothercare and more: multichannel update
We've delved into the latest crop of trading figures in search of ecommerce and multichannel trends, strategic insights and innovations in the way retailers are selling – and customers are buying – across sales channels. Here we're focusing on the latest updates from department stores, homewares, nursery retailers and general merchandisers.

The shift online – especially at Christmas

Debenhams, a Leading retailer in IRUK Top500 research, saw online sales grow by 13.9% in the 18 weeks to January 7, as group gross transaction value rose by 3.7%, and like-for-like sales, which strip out the effect of store openings and closures, rose by 3.5%. In the seven weeks to the same dates, online sales grew by 17%, while like-for-like sales rose by 5%, or 1.7% in constant currency.

John Lewis , an Elite retailer in the IRUK Top500, said in its Christmas trading update that 40% of its total sales took place online in the six weeks to December 31. This, said Sir Charlie Mayfield, chairman of the John Lewis Partnership, meant that "our multichannel capability has again proved its worth". Total John Lewis gross sales came in at £998.1m, 4.9% up on the same time last year and 2.7% up on a like-for-like basis. Online sales grew by 11.8%, contrasting with store sales growth of 0.8%.

House of Fraser , an Elite retailer in the IRUK Top500, said retail sales in the six weeks to December 31 were 2.7% up compared to the same time last year, including over the Black Friday weekend, when 41% of sales took place online.

Frank Slevin, chairman of House of Fraser said: “This is a good performance during our key trading period; having been supported by the investment we have made in our stores, our people and our core infrastructure over the last two years. We commenced laying the foundations for the transformation of the business in 2016 in anticipation of a challenging retail environment, and as we look forward to 2017 and beyond we must continue to adapt as the retail sector evolves."

Argos, an Elite retailer in the IRUK Top500, saw its online sales grow by 13% to account for 57% of sales in the third quarter, said parent company Sainsbury's in its third-quarter update.

Fellow IRUK Top500 Elite retailer Mothercare saw its online sales growth lift by 5.5% in its third quarter, the 13 weeks to January 7. That helped total UK sales to grow by 0.6%, year-on-year, or by 1% on a like-for-like basis. In the 41 weeks of its financial year to date, online sales grew by 6.4%, while total UK sales were down by 1.2%. That marks a turnaround for UK sales after a "challenging" summer trading period.

Leading IRUK Top500 retailer Marks & Spencer saw online sales at M&S.com grow by 9.4% in its third quarter, the 13 weeks to December 31. The figure, expressed in constant currency, is well ahead of the 4.3% (constant currency) growth reported across the group, which rises to 5.9% when currency flucutations are taken into account. UK sales rose by 4.5%.

UK sales at AO.com a Top250 retailer in the IRUK Top500, grew by 10.3% in the three months to December 31.

Dunelm , saw online home-delivered sales increase by 21.7% in the second quarter of its financial year – contrasting with total growth in revenue of 6.6% (to £261.9m), or 3.3% (to £253.8m) once the acquisition of Worldstores and Kiddicare was discounted.

Mobile and multichannel growth

At Debenhams, smartphone sales grew by 68% year-on-year.

John Lewis saw a continued move to mobile. Sales via smartphone grew by 80.9%, accounting for 37% of all traffic. Click and collect sales rose by 14.5% to make up 52% of all online orders. Last minute shoppers went into stores, making the week running up to Christmas a record one for branches.

There are now 30 Argos stores within branches of Sainsbury's.

Christmas, Black Friday and promotional strategies

Argos, an Elite retailer in the IRUK Top500, enjoyed a strong performance over Black Friday. Some 65% of its sales took place online over that period, and there were a quarter of a million Fast Track deliveries over the Cyber Weekend.

Debenhams focused on reducing promotions, for the sixth season, and saw full price sales increase by 2%, year-on-year. It did take part in Black Friday, and reported that sales for the event grew year-on-year both online and in stores.

Debenhams chief exeutive Sergio Bucher said: "I'm pleased with the performance we have achieved in the key trading weeks of Black Friday and over the Christmas peak, given the challenges in the broader environment and the strong performance last year. The resilience of Debenhams' differentiated offer is beginning to show through, with the growth we have driven in beauty and gifting. It's encouraging to see that the service improvements we have made helped us to deliver strong multi-channel sales growth." He'll be delivering an update on the strategy at interim results in April.

Marks & Spencer also tackled discounting in its clothing and home businesses, including over the Black Friday period, said chief executive Steve Rowe. "We substantially reduced sales on promotion in the period, with many fewer category promotions particularly over Black Friday," said Rowe. "Stock into sale during the quarter declined by c.7% with one fewer clearance event than last year. As a result of these actions, we saw a further improvement in full price sales."

AO.com's chief executive John Roberts said the retailer "performed well over our peak period, particularly through Black Friday, with the sheer dedication of our teams enabling us to deliver to our customers as promised."

John Lewis saw three peaks in its Christmas trading: Black Friday, Christmas week and Clearance.

Mothercare's chief executive Mark Newton-Jones had gone into the end-of-season sales with less stock than last year, thanks to "prudent stock management".

Delivery and distribution

Debenhams said it saw "an increased uptake in premium delivery services as our customers respond to the improvements we have introduced".

John Lewis says its supply chain "performed particularly well". That included a 33% rise in items processed on the Saturday after Christmas, compared to the equivalent day last year.

International online sales

AO World said its European business saw revenue grow by 28.4%, year-on-year, in constant currency. That, it said, reflected "a period of focus on building our logistics capabilities, capacity and a solid base for the business".

Strategic change and highlights

AO.com's John Roberts pointed to new category launches in both the UK and Germany. "We launched computing in the UK, and audio-visual in Germany, retailing both these categories the AO Way – offering a simply better customer experience, executed brilliantly by a brand and team that customers and suppliers trust. Early trading in computing has been encouraging and sales are building as we invest in attracting traffic to the category on ao.com, while both our businesses in Europe continue to gain traction and delight customers."

Dunelm says in its trading update, that: "The development of our online business is a key strategic objective and we firmly believe our acquisition of Worldstores, which completed on 28 November, is an opportunity to accelerate the growth of our internet operation, more than doubling its size, and enhancing our position as the destination homewares retailer in the UK, both online and offline." Chief executive John Roberts said the retailer was "excited by the opportunity it [the Worldstores acquisition] gives us to accelerate the growth of our online proposition."





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