Screwfix has become a model brand within its parent company the Kingfisher Group, thanks to its fast growth via digital, and in particular via mobile. Sales of £802m in the first half of its financial year were 10.4% ahead (or 4.5% on a like-for-like (LFL) basis), with digital sales up by 18%, including mobile up by 43%, and click and collect sales up by 21%. Its IT system forms the basis of the unified IT system that Kingfisher is currently rolling out across its business – it’s halfway through a five-year transformation plan that will see one product range and one IT system. And until the Kingfisher customer offer is fully unified, Screwfix UK is the only one of its brands that is adding stores at any pace – 21 opened in the first half of the year, taking it to 598 and it aims to have around 700 in the UK.
Sister company B&Q saw its overall sales fall by 2.3% to £1.8bn (-2.5% LFL) in the six months to July 31. Sales of weather-related goods rose by 4.9% in a hot summer, while other categories fell b 5.4%. Its online sales grew by 8%, including a 56% rise in click and collect and 41% rise in mobile, to account for 4% of total sales.
So what can other retailers learn from the success of Screwfix, an Elite retailer in IRUK Top500 research, and its sister business B&Q, rated as Leading in that list?
Strong mobile sales are at the heart of the Screwfix business: m-commerce grew by 43% in the half-year. The retailer recognises that its customers, largely working in trades, find it easier to use their mobile phones to order from site. It has a mobile app and a mobile website to serve their needs.
A new one-hour click and collect service, introduced last autumn, gave a boost to B&Q, which saw revenues from the service rise by 56% in the first half, compared to last year. At Screwfix, where customers can collect their orders in as little as five minutes, click and collect sales rose by 21%.
Screwfix and B&Q focus on different audiences within the same sector. Screwfix targets its tools, equipment and supplies at tradespeople, while B&Q does so for a DIY audience.
B&Q launched a bathroom planner tool on its website last November. Since then, 148,000 people have used it, and engagement increases as new features are added. That tool is set to be launched by Kingfisher’s French customers later in the year.
Meanwhile, Screwfix said its 10.4% sales growth to £802m was driven by in-store specialist trade desks that are exclusive to plumbers and electricians, as well as digital growth.
The Screwfix IT system is regarded within the Kingfisher Group as having "best-in-class" capability. Adding its benefits to its core ecommerce platforms includes improved digital market, site search, a new checkout and new mobile sites. So far around half of Kingfisher Group sales take place through the unified IT system, including B&Q and Castorama France. Castorama.fr launched in January and since then, says Kingfisher, we are encouraged by the increase in conversion seen to date and are working on further content development to improve the overall customer proposition. Rollout is about to start in Brico Dépôt France.
Kingfisher’s digital sales now account for 6% of group sales, up from 5% last year. But where digital is made available, more customers use it to buy: witness (above) the change that one-hour click and collect has made to B&Q sales. As yet, however, only 4% of B&Q sales are online.
The Kingfisher Group this week reported £6bn in sales in the first half of its financial year, to July 31. That’s 1.2% up compared to the same period last year. But pre-tax profits of £281m were 30% down from £402m.
Screwfix is an Elite retailer in IRUK Top500 research, while B&Q is ranked as Leading.
Véronique Laury, chief executive of Kingfisher, said this week the business was into the third year of a five-year transformation plan that is seeing the business, which operates in a number of European markets, move to offer a unified range via a single IT system. That system will support, among other areas, stores and online commerce. "The extent and pace of change in the retail sector is profound," said Laura. "We saw these changes and acted early. We’re now halfway through our ONE Kingfisher transformation and we are well on our way to becoming a truly customer-led, digital and efficient business.
"Transformation on this scale is tough, and there are challenges that we’re working through. There is still much to do to improve our performance in France and to remove inefficiencies within the business as we continue to transform at pace." She said that the first-half results showed a "solid" performance in the UK and Poland.
The retailer said that until its unified customer offer was in place it would open only a limited number of new stores, primarily at Screwfix UK, the brand that has become a model within the group thanks to its fast sales and profits growth, primarily driven by digital, and in particular, mobile sales.
Image courtesy of Screwfix