Card Factory has stepped up its multichannel investment, launching a new ecommerce website, trialling click and collect and planning a mobile app as it looks to differentiate itself from online-only competitors. It is also pausing new store format trials as it looks to understand where shoppers will want to buy in future.
The steps come after online sales growth of 120% during the Covid-19 lockdown helped Card Factory offset the effect of shutting its more than 1,000 UK shops.
The retailer had to act quickly to respond to a “sudden and significant” increase in new online customers that led to record-breaking daily sales, particularly of cards, balloons and party supplies for celebrations held at home. It launched a new website on July 2 in order to improve its online customer experience, adding both a wider product range and more multichannel services designed to set it apart from online-only retailers.
Card Factory says it will launch a mobile app this year, and it is also trialling click and collect. The retailer now says it will pause its plans to trial new format stores as it looks to understand how footfall is likely to change long-term in type of places it would want to open shops.
Card Factory today reported revenue of £100.5m in the six months to July 31 2020, down from £195.6m a year earlier. In-store sales fell by 4.4% over the period, while online and multichannel sales of £13.3m were 64.4% ahead of last time. In the lockdown period, from March 23 to June 14, online sales rose by 120%.
In all, 13.2% of sales took place online in the first half of the year, up from 4.1% a year earlier. Sales through third-party retailers also increased to £1.9m as more shoppers visited partners including Aldi in the UK and The Reject Shop in Australia. A trial in 15 branches of Matalan is also resuming. Pre-tax losses came in at £22.2m, down from a profit of £24.3m a year earlier.
Online has continued to trade well ahead of last year even after stores reopened: like-for-like ecommerce sales in the four weeks to September 20 were 71.6% up at Card Factory, and up by 9.4% at Getting Personal, which is currently being replatformed to the new Card Factory website where it will operate as a second storefront, sharing costs. Like-for-like sales – stripping out the effect of store, and business, openings and closures – were down by 6.9% across all sales channels, primarily stores, over the same period.
The retailer now says it’s well set up for Christmas, with Covid-secure store layouts and the multichannel fulfilment capability to make the most of sales whether they take place in-store or online. But it says its short-term recovery remains “sensitive” to the uncertainties of Covid-19, including the impact of local restrictions on footfall.
Card Factory executive chairman Paul Moody said he was proud of staff for their “significant contribution” in a period of “unprecedented disruption”. “In particular, for their unrelenting focus in driving the very successful phased store-reopening programme,” he said. “The combination of our unique customer insight, vertically integrated business model and market-leading position continues to ensure that we are well-positioned to meet the increased online demand, supply our commercial partners and to present the optimum ranges in our stores.
“We are pleased with both the trading performance as our stores have reopened and the positive feedback from customers who are visiting less frequently but spending more. Recognising the uncertainty of further Covid-19 measures and changes in consumer behaviour in the short-term, we are focused on a flawless execution of Christmas and the implementation of our refreshed strategy.”
Card Factory is a Top350 retailer in RXUK Top500 research. As of September 29 it sold online an from 1,017 UK shops.