ScS saw a 146% rise in online sales in its latest financial year, as shoppers turned to ecommerce to buy sofas during Covid-19 store lockdowns.
The sofa and upholstered furniture retailer, ranked Top350 in RXUK Top500 research, says that its investment in digital – including the launch of a new website at the start of the year – helped to boost its online sales, especially during periods in which its stores had to close for lockdowns. More shoppers are buying online, and those who visit ScS stores arrive having researched on its website beforehand. Online, therefore, is “key to improving the quality of our store footfall and subsequently conversion”.
The website launch came as the third lockdown started, and gave a period of web-only sales that “provided valuable insight that supported the business’ plans to push on with further web enhancements”. These include the launch of a range of online-only products and the launch of MyScSlive, offering video calls with in-store staff for product demonstrations. Flooring surveyors also ran virtual appointments, helping customers to measure their own homes – a service that remains available now.
ScS today reported revenue of £310.6m in the 53 weeks to July 31 2021. That’s up by 21.6% on the previous year. Online sales grew by 146% to £46.9m from £19.1m as shoppers bought online while its stores were closed for Covid-19 lockdowns – and as ScS’ distribution centres continued to operate through the year.
The retailer says that orders, measured on a like-for-like basis that strips out the effect of store closures and openings, were down by only 1.5% compared to 2020, even though lockdown closures lasted for 17 weeks in 2021, up from nine weeks in 2020. They were 6.5% down compared to pre-Covid 2019.
Pre-tax profits of £22.7m were up from a loss of £3.1m the previous year. ScS has repaid £3m in furlough grants, while paying staff 100% of their salary during store closures.
In the first nine weeks of the financial year so far – to October 2 – LFL orders are 21% down on the same period last year – when ScS saw high levels of orders following the end of the first lockdown in 2020 – and up by 11.9% on the same period in 2019. The retailer says it is positive about its prospects for the full year – but warns of supply chain disruption.
Steve Carson, chief executive of ScS, says: “Trading since the start of the new financial year has remained strong, with two year like-for-like order intake growth of 11.9% for the nine weeks to October 2 2021. One year like-for-like orders have fallen 21% as a result of the significant bounce following the lockdown in the prior year. We are delighted with the strong orders performance since the start of the new financial year. However, we are cognisant of the ongoing challenges we, and many other businesses, are facing with regards to the supply chain, including driver shortages, raw material increases and shipping costs and delays.”
Multichannel strategy
Looking ahead, the retailer now plans to focus on the customer experience across its showrooms, website, delivery and aftercare teams, using customer data to improve the service it offers.
ScS will also invest in its digital team and leadership, adding digital marketing tools to improve its analytics, modelling and targeting, while improving the user experience online, with the aim of giving a seamless omnichannel experience whether customers browse online and buy in store, or vice versa. Showrooms will be refreshed to create a “simpler, more inspiring experience to showcase latest developments in range and brands”. The retailer will consider moving out of less profitable locations, and will manage its rent costs in an active way.
Sustainability
ScS has joined the Furniture Industry Sustainability Programme during the year, and recruited a specialist supply chain sustainability manager. It now sources its electricity from renewable sources and recycled or diverted from landfill 99.9% of its waste. Over the next year it plans to set out a sustainability road map.
