Search
Close this search box.

Very.co.uk and its mobile strategy drive marginal growth for Shop Direct Group

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

Shop Direct has reported slower than expected growth across 2017/18 financial year (FY), it’s very.co.uk brand has pushed figures up, driven by the company’s ‘mobile first’ approach.

Group sales are up 1.5% year-on-year to £1,958.8 million, with Very sales up 9.9% to £1,389.1 million, contributing some 71% of the group’s revenue. Overall group growth was hampered by Littlewoods controlled decline being maintained, with sales there down 14.5% to £569.7 million.

Much of the growth is down to the mobile-first strategy at Very. Overall the retailer has seen a 35.9% boom in smartphone app orders, representing a quarter of total sales. But mobile is playing an increasing role across the group, says group chief executive, Henry Birch, in the group’s financial report.

According to Birch, Very.co.uk, VeryExclusive.co.uk, Littlewoods.com and LittlewoodsIreland.ie sell some 1,800 famous brands and receive more than 1.4 million website visits a day, with 74% of online sales now completed on mobile devices – up 5% on last year.

Going forward, Birch and his team are planning to put more emphasis on mobile and on customer service. “In FY18, we continued to achieve against our stated ambition of transforming into a world class digital retailer, as well as laying foundations for the future,” he says. “Our focus on a seamless customer journey, both through online experience and customer service, helped us increase Net Promoter Score (NPS), our measure of customer advocacy, by 4 points, to secure our record annual score. This improvement was driven  by changing the way our teams work together within our retail and operations functions to become even more customer-centric.”

But the group in general – and jewell in the crown Very in particular – face some strong challenges. According to Sofie Willmott, Senior Retail Analyst at GlobalData, a leading data and analytics company: “Next is hot on the heels of Very.co.uk, introducing more third-party brands with the crossover in product range becoming more evident and key names including Nike, Superdry and Ted Baker sold by both players. The retailer’s growing branded offer along with its Next Pay credit account, Next Unlimited delivery saver scheme and its broad customer base, puts Very.co.uk under pressure particularly as Next’s proposition clearly resonates with consumers – its H1 online sales (for the 26 weeks to 28 July 2018) rose 15.5% on the previous year.”

Willmott continues: “With the UK online clothing & footwear market growing by 13.5% in 2017 and forecast to rise by 10.8% in 2018, Shop Direct far underperformed in this sector (which accounts for over a third of sales) with clothing & footwear retail sales rising just 0.2% and womenswear sales in decline. As many online pureplays, namely ASOS and the Boohoo group continue to outperform their multichannel competitors, Shop Direct is being dragged down by Littlewoods.com and must evolve its product proposition to drive future growth. In contrast, the electricals division outperformed the market with retail revenue lifting 7.2% as consumers turned to the retailer to take advantage of its credit options for higher value items like mobiles, consoles and smart technology.”

However, Birch is bullish. “Shop Direct has been through a ground-breaking transformation founded in our purpose to make good things easily accessible to more people. We had hundreds of UK stores just 15 years ago and were a catalogue retailer just 6 years ago. Today, we’re a successful digital business. However, we know that we can’t stand still, and we have a clear set of strategic priorities for the year ahead. “

Birch concludes: “Key amongst those priorities is a focus on attracting and retaining more of our target customers – those who most value our combined retail and credit offering. We will do it by further developing our acquisition marketing and using our unique data asset to more accurately understand and target customers.”

Image: Very.co.uk

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on IR.net