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Dunelm Focuses Online

The Worldstores acquisition should improve Dunelm’s online service

The Worldstores acquisition should improve Dunelm’s online service

Dunelm’s latest figures, announced in July, may have been disappointing with a profits warning and store sales down 4.6%, but with online business up by nearly 42% its decision in 2016 to buy the struggling WS Group, comprising Worldstores, Kiddicare and Achica, to boost its online presence, could prove a strategically significant move.

While Achica and Kiddicare were less relevant to Dunelm’s core market – Achica was sold to BrandAlley earlier this year – one reason suggested for the acquisition was Worldstores superior online technology and experience which could be used to improve Dunelm’s ecommerce performance. At the time, Dunelm’s then chief executive, John Browett, suggested that the acquisition was an “opportunity to accelerate the growth of our internet operation, more than doubling its size” while “Worldstores’ extensive homewares and furniture offer and unique platform for next-day delivery … will strengthen our leading position as the UK’s ‘home of homes’.”

While WS Group had a turnover of £100m, it struggled to make a profit and was expected to go into administration prior to Dunelm’s acquisition. Its Worldstores site boasted 500,000 product lines and many have now also been added to Dunelm’s offer, although the two sites currently remain quite separate.

In the coming year, Dunelm will be integrating the existing Kiddicare site into while this website will migrate to Worldstores’ technology platform bringing various improvements including click-and-collect capability. As Nick Wilkinson, who replaced Browett as chief executive at the end of 2017, said: “We have expanded our customer reach and digital capabilities significantly over the last twelve months and will continue to do so as we exploit the technology assets which we acquired with Worldstores”.

While Worldstores’ site offers next-day delivery on all items. Dunelm’s can only currently manage estimated delivery dates “shown on individual product pages and during checkout”. Similarly, while Dunelm’s current “reserve and collect” option promises that reservations will generally be ready to collect “within three hours”, shoppers must “wait to receive confirmation” before attempting to do so.

While total group sales for the year to June 2018 reached more than £1billion. Dunelm’s fourth quarter store sales figures were disappointing, blamed on low footfall, caused in part by the heatwave and World Cup. Perhaps significantly Dunelm, which had been regularly expanding its store portfolio, opened no new stores in the final quarter of the year. While most shoppers will still expect to “touch-and-feel” the beds or chairs they choose to buy, given the current drift from real-world retail to online, Dunelm’s focus on improving its online capability with a strategic acquisition may prove extremely percipient.

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