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DFS sees sales grow as it makes the omnichannel experience 'as smooth as possible'

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DFS
DFS

DFS said it had seen online sales grow strongly as it focuses on a smooth omnichannel journey.

The sofa retailer, a Top350 business in IRUK Top500 research, today reported revenue of £396.1m in the six months to January 27, 4.3% up on the same time last year. Online sales grew by 8.1%. But that rate of growth was down from 13.9% at the same time last year and, after investment in acquiring Sofology for a cash payment of £26m and, just after Christmas, assets and IP from Multiyork Furniture in administration for £1.2m, pre-tax profits of £7m were down by 58.1% on the same time last year.

DFS chief executive Ian Filby said: "We have seen a strengthening trading performance across the first half of the financial year and through February into March. We therefore remain confident that, despite the current challenging market conditions, the group will deliver modest growth in EBITDA and generate strong cashflow across this financial year, in-line with our expectations."

Here are the highlights of what DFS said about its multichannel strategy.

Omnichannel
Gross online sales, including both telephone and ecommerce, topped £160m in the last year on a pro-forma basis, while traffic to dfs.co.uk was 10% higher in January 2018 than a year earlier. It said it had more than 40% of traffic to its specialist segment, with DFS the second-most Googled term, after ’sofa’.

DFS says that more than 80% of its customers now research online before visiting a DFS showroom to see an item for themselves. That makes its websites the primary source for their research. With that in mind it has invested in its website and in the omnichannel experience. "...we know our customer journey frequently steps across channels," it said in today’s results. "We have continued our focus to make this omnichannel journey as smooth as possible for our customers." It has an 80% customer experience score, through Foresee FXI, for its mobile website, above, it says, the retail market average of 78%.

"Our group’s digital evolution is accelerating and is being enhanced through our innovation partnership programme," said DFS in its half-year figures. "This programme has already created our successful Swoosh visualisation technology and our bespoke Apollo furniture logistics software, which underpins our CDC operations, controlling van scheduling, with dynamic learning and optimisation of routes. We continue to experiment in other technologies including neural linguistics analysis to optimise performance of our telephone sales teams, in-store location beacon technology, variant testing software to optimise web forms and AI-assisted software to enhance our learning and recruitment activities."

Brand engagement
The retailer now has partnerships that see it make sofas under the French Connection, House Beautiful, Country Living and Joules brands. In the last half-year those sales grew by 8%.

Operations and logistics
DFS has been working on a strategy to co-locate stores including DFS, Sofa Workshop and Dwell by reducing in-store warehousing. Stock has instead been moved into a network of customer distribution centres that it completed during the half-year with the opening of its 19th centre. Cost per order has fallen by £2 year-on-year as a result of the programme, it said, while customer satisfaction scores had also improved. It opened 10 co-located stores during the period, and said the same space saw an average sales uplift of more than 15%, while sales from its Dwell (+£1m in additional revenues) and Sofa Workshop (+£0.9m) brands also grew strongly.

The retailer has also trialled a small store format, opening a 6,000 sq ft store in a retail park in Chelmsford and planning another in Guildford before Easter. It has experimented with both 2,500 sq ft stores and 5,000 sq ft to 6,000 sq ft stores, and believes that the second is likely to bring stronger rturns.

International
The retailer opened one new store in the Netherlands, where it is now marketing on TV while it has two Spanish stores that are now trading profitably.

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