Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

DFS sees online sales grow as it reimagines selling sofas for a digital age

Linked InTwitterFacebookeCard
Sharelines

DFS sees online sales grow as it reworks the way it sells sofas for a digital age

DFS says it is well-placed to benefit as sales of its sofas grow strongly online – and that it is making progress with its ambition of leading sofa retailing in a digital age.

 

The furniture business, a Top350 retailer in IRUK Top500 research, today reported sales growth over its latest financial year and said that for the coming year it would focus on its strategy and things that it could control against a backdrop of economic and political uncertainty that appears to be slowing sales at the beginning of its new year.

 

DFS today reported revenues of £901m in the 48 weeks to June 30 – a short financial year as the group moved to a new year start date – up from £870.5m in the 52 weeks of the previous year. That’s 3.5% up on the previous year based on the new 48 week year, or 14.4% up based on the previous length of the financial year. Pre-tax profits of £22.4m, after one-off costs, were down by 13.2% in the 40 weeks from £25.8m a year earlier. But based on a notional 52-week year, they were up by 31.1% at £50.2m.

 

Incoming DFS chief executive Tim Stacey said: “Our trading performance for the last financial year was good overall, as we continue to execute our new strategy to lead sofa retailing in the digital age. Like-for-like growth across all brands and all channels, especially online and in Sofology, has enabled us to grow our market share and as we celebrate DFS’ 50th anniversary, we believe that our group is well-positioned for the long-term.”

 

Stacey said that orders had been subdued over the first 12 weeks of the current financial year in the light of “the uncertain economic and political backdrop,” adding: “We have seen reduced levels of footfall across all our brands, which we attribute to lower levels of consumer confidence and housing transactions, the two key drivers of the upholstery market.” He said it was difficult to predict what future political developments would mean for the market, but said it would focus on the variables that it could control and on executing its strategy.

 

Multichannel strategy

DFS gross ecommerce sales were up by 16.2% over the last financial year as the business concentrates on multichannel. Recent acquisition Sofology saw its sales reach £260.7m in the 52 weeks to June 30 – 14.4% up on the same time last year. DFS said that it had made significant progress in integrating the business, and sharing resources and knowledge across the group.

 

Over the year the retailer has invested in improving the end-to-end journey of its sofa buyers. That starts with inspiring customers as they research, through user-generated content, improved lifestyle imagery, blog and vlog partnerships as well as augmented reality visualisation one and on mobile. It has introduced a range of customer engagement tools such as mobile text chat and machine-learning chatbots that support customers through purchase. Shoppers can also track their orders and book online delivery slots. “The results are promising and we have seen improved conversion rates and positive customer feedback as a result of these initiatives,” said Stacey in his annual review. DFS has also focused on improving the mobile experience and says that 60% of shoppers now complete their transactions on a mobile device.

 

In-store, the retailer has worked with data partner Satalia to develop footfall models, helping it have the right number of staff in store at the right time. Its shops remain important because, said Stacey, “we know that the vast majority of customers still want to see, touch and sit on a product before committing to a sofa purchase and our well-invested showroom network is at the heart of our omnichannel strategy to drive the DFS brand. We also continue to invest in the training and development of our retail colleagues as well as the physical showroom environment to ensure we offer the market-leading sofa buying experience.” The retailer is also continuing to co-locate its different brands, which include DFS, Sofology, Dwell and Sofa Workshop, where possible.

 

Customer experience

DFS said its market research told it that the choice of sofas can be “challenging” for customers and that it has developed a So Simple range, with eight sofa models and fewer choices of colours and fabrics, in order to make the decision process simpler. “We’ve been trialling this collection online and across a small number of showrooms and the initial response is positive,” said Stacey.

 

The retailer has also taken action after its customer satisfaction measures dipped following port disruptions at Felixstowe in summer 2018 and as a result of some supplier lead times. It is removing a “small number of poorly performing suppliers” as a result.

 

Operations and logistics

DFS is sharing assets from technology to manufacturing facilities, and distribution networks. To this end, DFS customer delivery centres are being to fulfil Sofology and Sofa Workshop orders, while bespoke route planning software is being used across its post-sales team, reducing service queries as a result.

 

Brexit

DFS, which operates stores in the Netherlands as well as the UK, says the biggest risks to its business as a result of Brexit are likely to come through consumer confidence and border delays. “While we have sought to mitigate these, their ultimate impacts are uncertain and have the potential to affect our overall financial performance in the year. We will continue our preparations to minimise the disruption as part of our regular risk mitigation process, until the UK and the EU’s path forward is clear.”

 

Image courtesy of DFS

Linked InTwitterFacebookeCard

The InternetRetailing Newsletter

A curated update containing news analysis, reports, podcasts and opinion - completely free and delivered three times weekly

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter