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Digital focus delivers profit for Shop Direct

Shop Direct , which owns the likes of Littlewoods.com and Very.co.uk, has reported its first annual pre-tax profit for a decade.

The multichannel retailer said that in the 12 months to 30 June 2013, group sales were up 1% year on year to £1.69 billion and pre-tax profit reached £6.6 million. Last year, the business made a loss of almost £60 million due to a number of redundancy payments and significant investment in its internet operation.

A drive to enhance its mobile and other digital platforms, as well as a strong focus on new brands, is reportedly now helping the business move forward. Here are some of the other highlights for the year:

Alex Baldock, CEO of Shop Direct, said that reporting a profit was “an important milestone” for the business, adding: “Our digital progress also continues at pace, with online sales now exceeding 80% and almost two-fifths of those coming from mobile.

“Almost half of our customers now browse and shop our sites across multiple devices, with tablets in particular increasing in importance in the customer journey.

“We have a new level of ambition and have set out a clearly defined and disciplined strategy for the continued evolution of Shop Direct, with world class personalisation at the heart. Our new corporate brand reflects this sharp focus and our confidence in the continued digital development of the business.”

The plan, as detailed in today’s results statement, is for Shop Direct to become “a world class digital retailer” by building on its substantial eCommerce and financial services data.

Baldock and his team have placed a significant focus on personalisation, which they want to form the core of the company’s growth strategy over the next five years. The results, it hopes, will be a “highly relevant, intuitive shopping experience” for Shop Direct customers.

Its stated approach is to invest in medium and long-term innovation, while also delivering quick wins, such as customer-unique email marketing and on-site product recommendations. Celebrity brand ambassadors at the retailer include Fearne Cotton (pictured) and Myleene Klass.

A mix of own brand and recognisable branded products is also part of the strategy, which has been welcomed by Neil Saunders, managing director of retail research group Conlumino, who feels it is important to provide labels that attract younger consumers and drive online traffic.

“This balanced product offering is, in our view, one of the strengths of Shop Direct inasmuch as it helps to give it destination status as a ‘digital department store’,” he explained.

He added that the group has been “highly successful” in making its retailing structure more digital over the last few years, which is reflected in the high percentage of sales now conducted via PC and mobile devices.

Saunders remarked: “Not only has this allowed savings to be made on the distribution of physical catalogues, but it also provides an excellent platform for future growth as the company pushes ahead with its plans to create a more personalised customer experience.”

http://conlumino.com/

http://www.shopdirect.com/