Directories business Yell is looking to ecommerce for its future growth as revenues at its directories businesses fall. The company has announced details of its planned new eMarketplace, where consumers and small businesses can connected locally, as part of an internet retailing-focused drive for the future.
Yell today reported an 11.1% fall in group revenue to £383.3m, and said income was falling in both its online and offline (18.5% down) directories. Its Internet Yellow Pages business saw turnover fall by 7.1% to £89.5m, while its print and telephone directory services saw income down by 18.5% to £263.6m. Earnings before interest, tax, depreciation and amortisation were also down, by £20.2m to £109.1m.
There was, however, one area of strong growth, with the company’s digital services revenues growing by 164.9% to £30.2m, helping total digital customer numbers to rise by 8.1% to 927,000 and average annual digital spend to rise by 11.8% to £531.
It’s to this area that Yell is pinning its hopes for future growth, with a new ecommerce strategy aimed at returning the group to profitable growth. The new strategy, says Yell, will put the customer experience at the heart of its business and will increase its potential market from around £28bn to £280bn between now and 2015 while meeting "significant unmet needs among SMEs and consumers in the local eMarketplace".
That includes building what Yell says will be the first local eMarketplace platform for consumers and SMEs to connect locally through services such as local ecommerce, loyalty programmes and concierge services. At the same time it will expand beyond advertising to provide digital services from marketing to payment services, affinity cards and business operations to small businesses. It will be looking to deliver "best in class customer experience" through its new digital brand and will move into new markets, such as verticals in the SME industry and campus services as well as Latin markets. At the same time it will look to extend the life of its print business through services such as local newsletters.
Mike Pocock, chief executive, said today that the new strategy would build on Yell’s position in the local marketplace, as it capitalized on the convergence between the needs of consumers and small and medium-sized enterprises (SMEs) in the digital world. He said: “Yell intends to become the leading SME digital services provider and will bring consumers and SMEs together to establish a new local online marketplace. The impact of these initiatives, couple with cost savings of £100m over the next two years, will return the group to profitable growth. I look forward to reporting progress on this transformation.”
Our view: How long is it since you last used a phone directory to find a telephone number? I know if I'm sitting in front of a computer I use a search engine to look at a website for information, and since the number of those on the move with smartphones is growing it seems likely that trend is starting to develop in mobile too, and is only likely to intensify as time passes. So this news of a new strategy for the Yell group is timely, and it's also one that's interesting to anyone considering how to reinvent their business for the digital age.