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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Retail Review - Joe Tarragano, Director, Transform - Score 15/25 (IRM52)

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It seems that the Very brand has gone from birth to an £800m powerhouse in the blink of an eye and we could therefore assume that Very Exclusive is in safe hands. Shop Direct is a business filled with smart people. With home grown talent like Gareth Jones over-seeing Very Exclusive we can expect the opportunities and challenges to be well managed. Shop Direct has been clever enough to recognise luxury and even high street premium is very different from its core. It’s added to the management line-up with My-Wardrobe founder Sarah Curran, also bringing in key individuals from Harrods and Harvey Nichols to run buying, beauty, and PR. This team instantly adds experience, credibility and contacts in a part of the fashion sector where managing brand sensitivities and communications are even more critical than usual.



Apart from well-qualified leadership, the brand also has access to the Shop Direct customer base. Jones has suggested 1.8m of Very’s customers are ‘interested’ and the halo effect on core Very sales is not to be under-estimated. However, with an average price point of £240 and a target market of 26-35 year olds, the likely crossover customer-base is probably somewhere between 250,000 and 500,000. From a standing start that’s still a strong pool to tap into and Shop Direct’s skills in analytics and marketing should ensure these customers are activated, incentivised and converted swiftly.



However, for all the talk of democratising luxury, is there a credit-oriented market for the products? While Very Exclusive is a retailer, its the financial services side that is the point of difference and a critical underpinning of the entire business. Does the customer wanting a £400 Marc Jacobs bag find Very Exclusive’s “Take 3” payment option appealing, or are they today content to pay using alternate methods on the House of Fraser, John Lewis or Debenhams websites for the same products? This same question was no doubt asked when Littlewoods first started selling £1,000 televisions, and the evidence clearly shows that Shop Direct’s existing demographic has an appetite to spend at those levels. Whether new customer types will be attracted to the Very Exclusive site, and then into other Shop Direct brands, is much less clear.



The PR activity has certainly been substantial and designed to entice new customers. The brand launched at Watches of Switzerland, during London Fashion Week. With guests whisked away in Maseratis, it all oozed luxury and exclusivity, and Grazia, Vogue and others lapped it up. But looking more closely at the range, VeryExclusive is no Net a Porter, nor even a Selfridges. With around 5% of its 900 clothing items costing more than £500, its offering is firmly within the grasp of the higher end of Shop Direct’s customer base. The designer halo lifts the entire offering and enables their more traditional customer to shop aspirationally amongst the 50% of products in the £100 to £250 range. With customers feeling more positive towards the economy, the timing is right.



Very Exclusive also benefits from the successful and advanced platforms, culture, analytics and fulfilment capabilities enabling Shop Direct’s other offerings. The only cautionary note is that selling luxury and building a premium experience goes beyond the product itself. Very Exclusive’s website is more stylised than the core Very site, making greater use of content, curation and editorial, but it lacks some of the polish and visual gloss of sites such as



Burberry or Net a Porter. And if the £500 McQ dress arrives not in tissue paper but via a black vinyl bag delivered to a Collect+ location, is the brand or the customer getting the holistic experience that underpins the value perception?

Shop Direct will learn much from this new proposition. Will customers who traditionally order items in multiple sizes and colours be less likely to do so if the basket costs £1,500? Will they see a rise in customers returning items that have obviously been worn? How will their marketing campaigns support customers buying one annual hero piece from Very Exclusive but mostly purchasing low-end Very products? No doubt the experience of its new hires and its emphasis on evidence based decision making will lead Shop Direct to learn the lessons fast and adapt accordingly. And having cracked the code for how to launch and run such more targeted propositions perhaps we might see Shop Direct further expand its Very sub-brands.



With so many positives underpinning this new offering, if the brands stay willing to embrace democratised luxury and given customers crave it, Very Exclusive will no doubt be the super model to watch.



Scoring
The simple scoring from Transform is based on whether or not five services are offered by the retailer in the UK with a score of 0 for no and 5 for yes. On this basis, Very Exclusive scores 15/25.



Collection in-store: No
Mobile app: Yes
Mobile web: Yes
iPad app: Yes
In-store tech: No

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