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Debenhams: innovations in mobile and delivery

STRATEGIC DECISIONS AROUND multichannel strategy in recent years have helped Debenhams win custom from shoppers who want to buy whenever and wherever they want. Ultimately, Debenhams wants to see online sales reach 30% of its UK gross transaction value (GTV). In its most recent results, for the half-year to February 2016, online accounted for 15.1% of total sales of £1.3bn, after growing by 10% to reach £246m. “Our ambition is to grow our multichannel business in order to meet the evolving needs of our customers,” it said in those results.

Debenhams stands out in IRUK Top500 research for an innovative approach to online delivery and a strong mobile performance. It was among the 68% of IRUK Top500 retailers that provided next-day delivery, and it enabled customers to nominate day and time of delivery for orders, something that was only available from 16% of Top500 retailers. Its transactional iOS app enables customers to visit local stores and use their loyalty cards. Customers can see reviews as well as a range of images of the product that they can zoom in on.

In delivery, it focuses on being convenient, competitive and profitable. Ahead of last Christmas, for example, it extended cut-off times for next-day and evening delivery, while at the same time making charges for those deliveries most competitive. Convenience came as the retailer extended its innovative ‘endless aisle’ to about 150 stores, enabling online orders to be picked from stock held in store for home delivery. Meanwhile, 31% of online sales were picked up from the store, using the click-and-collect service.

A mobile-first strategy has delivered strong sales growth from smartphone-wielding shoppers. Sales over mobile devices emerged as the retailer’s fastest-growing channel in the half-year to February 2016. Almost 50% of its online sales were made via mobile in the half-year to February 2016 – a period when smartphones alone delivered year-on-year revenue growth of almost 70%. Investment has gone into multichannel marketing, aimed at driving

mobile visits and conversion.

Debenhams has also focused strongly on an international strategy that envisages multichannel growth in overseas markets, where it aims to grow sales to a third of group GTV. At the time of its half-year results, the company sold online in more than 60 countries and had recently launched a new international web platform, enabling local language and payments websites for France, Spain, Germany, Australia and Cyprus, with more markets planned. International sales rose by 3.2% to £292.2m on a constant currency basis, although international operating profit fell by 5.6% to £23.5m.

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