Topps Tiles said “almost all” its customers still want to come and see its tiles in-store before buying, but that for most, a visit to its website is the first step in the customer journey. Digital is becoming a more important part of its multichannel service as consumer behaviour changes.
The retailer, ranked Top100 in IRUK Top500 research, is continuing its retail strategy of “out-specialising the specialists” as more shoppers now research online before visiting a store. It has also invested in its new Parkside commercial arm over the year and said this would double its potential market, since 55% of the £700m tile market is from retail and 45% commercial. During the year it opened two commercial showrooms.
But it warned that Brexit was likely to have implications for the group, from supply issues to a fall in consumer confidence, and a reduced labour pool.
Chief executive Matthew Williams said: “This has been an important year of strategic progress for the Topps Tiles Group, in which our expansion into commercial has seen us double our addressable market while remaining firmly within our tile specialism, where our buying scale and expertise gives us a significant competitive advantage.
The update came as Topps Tiles reported revenue of £216.9m in the year to September 29, 2.4% up on the same time last year. But pre-tax profits of £12.7m were down by 25.3% on the same time last year as new stores, its new Parkside commercial business, and the pressures of inflation all added costs. In the first eight weeks of the current financial year, like-for-like group revenue has been 1.9% down on last time.
Williams said: “Against a challenging market backdrop, the group delivered a robust trading performance for the year with flat like-for-like sales and market-leading gross margins in retail, and the foundations laid for significant sales growth in commercial in the year ahead.
“At the start of the new financial year, trading conditions remain challenging and like-for-like sales in the first eight weeks have been negative against a strong prior year comparator. Whilst retaining a cautious view on the outlook, we remain confident that our expansion into the commercial tile market, coupled with our market-leading retail operation, gives us a solid platform for future growth.”
Topps Tiles says it has seen online traffic rise as it has increased its investment in digital marketing. The website is the first stop for most of its customers, who research online before visiting a store. Both online customers and in-store staff use its visualiser for inspiration.
The retailer is upgrading all its stores, adding features such as design advice areas where customers can consult staff, who can provide bespoke design solutions. “The majority of our customers shop infrequently for tiles which means that when they do they need lots of advice and expertise,” said Topps in its figures. “Our customer satisfaction scores are very important to us and in the year ahead we will launch a new ‘voice of the customer’ feedback programme that will enable us to listen to our retail and trade customers’ feedback in real time, allowing us to learn and adapt to their needs.”
It also says its store estate makes it very convenient for most of the UK population. It had 368 stores by the end of the year – down from 372 a year earlier – and says it will continue to manage the portfolio actively, reviewing the optimum size of its estate as customer needs change.