Jan 14, 2019
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Shop Direct has strong Christmas, fashion is standout performer

Jan 14, 2019

Shop Direct delivered some (late) Christmas cheer on Monday morning with news that it enjoyed “strong” seasonal trading in what was an undeniably challenging market.

Shop Direct/Very.co.uk

The privately owned company, which operates multi-category digital retailers Very.co.uk and Littlewoods.com, saw its group revenue rising by 3.7% in the seven weeks to December 28.

And while an increase of that size might not seem excessively strong, in the context of the trading season that we've just enjoyed/endured, it wasn't too shabby.

The most impressive performance came from its Very brand, which saw year-on-year growth of 8.8%. It’s the firm’s biggest operation and continued its status as the company's fastest-growing unit. It didn't share figures for Littlewoods.

And another fact supporting the company view that a 3.7% rise was strong is that's its revenue rise was achieved while maintaining the retail margin in line with last year.

It saw revenue growth across all four group product categories – clothing and footwear, electrical, seasonal, and furniture and homewares.

But clothing and footwear was the “standout” product category, up 8% year-on-year with a 15.7% surge at Very. The performance was driven by sportswear, which grew an astonishing 22.8% at group level and 33% at Very.

The season included the company’s earliest and longest Black Friday promotional period, which ran from November 9 until November 27, four days longer than in 2017. This made Very and Littlewoods among the first in the market to launch their campaigns.

It resulted in a “strong, positive revenue performance” that continued into December.

Overall during the entire period, the company saw 107.3 million site visits, up 8% year-on-year, and 79% of its online sales came from mobile devices, up from 74% during the same period in 2017. That meant total mobile sales rose 12.7%.

It was all helped by the company’s heavy investment in advanced technology in recent periods with additions such as its in-app chatbot Very Assistant, allowing customers to ask account-related questions in their own words and receive answers from the Assistant. And it also had a Facebook Messenger chatbot, which was built in-house to support the Very Christmas brand campaign.

It all drove social media and general customer engagement and overall, its “improved customer service and online self-service options helped Shop Direct to reduce customer calls into the contact centres by 30%.”

The company had also added technology to help make its delivery more smooth with features like ‘track the van’ capability, delivery countdown and driver contact details.

And smooth delivery was hugely important given that the company directly delivered 6.8 million parcels this year compared to 6.5 million last year. It also fulfilled 25% of its parcels via Collect Plus.

So is the company feeling confident for the season ahead? It looks that way. CEO Henry Birch said the peak trading performance “gives us reason for cautious optimism.”

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