Halfords is pushing forward with its strategy to improve the collection of data to gain a "complete single view" of the customer, following the introduction of eReceipts and email personalisation to improve the customer journey.
While announcing its full-year financial results, the retailer said it will continue to focus on improving its data collection, as well as implementing a number of new improvements to its IT infrastructure.
The retailer today announced flat sales and profits, with full year revenue reported as £1.02 billion (up 1.7%), while profit before tax dipped 1.2%, in the year to 1 April, to £79.8 million. Group like-for-likes were up 1.5% (retail 1.3% and Autocentres 2.5%).
CEO, Jill McDonald, said the retailer had gained market share in both automotive and cycling, while blaming the dip in profits on poor cycling sales last summer due to the bad weather.
"We also saw strong growth in our service-led offerings, including our 3Bs fitting in motoring, which is now complemented by a similar motorbike service," she said. "In cycling our sales improved in the second half of the year and cycle repair delivered good growth. The recent acquisition of Tredz alongside the continued expansion of Cycle Republic and the launch of our new Laura Trott range demonstrates the strength and breadth of our cycling proposition."
Meanwhile, eCommerce sales grew 1.4% and represented 12.1% of total retail sales – which have remained stagnant year-on-year. The retailer pointed out the importance of its 462-strong store network to support click & collect, with around 90% of online orders picked up in store.
Over the last year Halfords has also enhanced its fulfilment offering by adding specific delivery time slots and extending the online order cut-off deadlines.
In November, the retailer put in place its new strategy, entitled 'Moving Up A Gear'. One of its five key pillars was called 'Putting Customers in the Driving Seat', which focuses on improving customer experience through data and personalisation.
In the last few weeks the retailer has started to send out its first tailored email campaigns using information shared by the customer. The retailer also plans to embark on a customer discovery project this summer, where it will use the enhanced customer data to segment customers to better understand their shopping habits.
"Personalisation is a customer trend across many different sectors and we're focusing predominantly on customer data to ensure we are increasingly communicating with the customer, but making messages more relevant," McDonald told Essential Retail. "For instance, we've introduced our six-week bike check – people who have bought a bike might forget, it's not front of mind, but now we remind people. We're continuing to mine out that area and also make recommendations based on products bought using our bespoke recommendation engine."
In order to get hold of this customer data, Halfords introduced eReceipts over the last quarter and has since collected over one million email addresses, of which the majority are new contacts on the Halfords database. The retailer said it wants to develop a "complete single view" of its customer, and in order to do so it must join up numerous databases within its Halfords, Cycle Republic and Autocentres brands.
The retailer now matches 15% of retail sales at Halfords to customers across on and offline, up from 3% in November 2015 and it now has the ability to match online orders to customers when they collect in store.
Highlighting the importance of these data collection efforts, McDonald said Halfords is looking to increase this figure significantly over the next couple of years, but would not reveal any targets. "It is an area we know customers are more willing to give data because email addresses enables them to have easy access to warranty information etc," she said. "We only ask for email addresses on purchases over £10 and we're very much embedding it in processes in store."
Another pillar of the new strategy focuses on infrastructure, where investment remains a priority for the retailer. But McDonald said it has moved on from fixing the foundations of the IT business to focusing on customer and colleague-facing enhancements.
In the year ahead, the retailer plans to implement a new point of sale solution which will allow store colleagues to look up customer details from a live database at the till, which will improve the speed and accuracy of matching and customer interface. Meanwhile, the second key IT project over the next 12 months will be the introduction of a new people resource planning tool.
Commenting in the financial statement, McDonald said: "This change in focus began during FY16 with projects such as the online marketplace, new tills in stores, electronic number-plate lookups and bike finance online. There are also a number of developments that we have been working on in recent months that will launch in the coming weeks: a transactional Cycle Republic website, contactless payments in store and the ability to use trade cards online."
Its supply chain infrastructure has also significantly changed over the last 18 months. In October 2014 the retailer moved from one delivery to stores per week, to five and in August 2015 it settled on a three-day-a-week outsourced delivery solution.
"This is now embedded, stable and working well; providing the benefits of good availability on a cost effective basis. Availability has remained at strong levels through the transition and thereafter," explained McDonald.
It has also recently been reviewing its long-term supply chain requirements, concluding that to support future growth it will develop its warehouse infrastructure to improve customer service, without any significant ongoing changes to warehouse and distribution operating costs or capital expenditure guidance.