Halfords clicks into gear on back of IT investment

Bike and car parts retailer Halfords reported strong half-year results this week, with like-for-like retail revenues up 7.7% year on year for the 26 weeks to 28 September.

The company said pre-tax profits rose 5.2% to £44.6 million on the back of total sales of £490.6 million, and the business is looking to enhance its offering further with significant IT and digital development over the coming months.

As part of a recently launched customer service improvement programme called Getting into Gear, Halfords spent much of the period updating stores with new systems and improving its retail website. A key focus has been on infrastructure, particularly across IT systems and capability.

Over the course of the 26-week period, new chip & PIN pads were installed in more than 300 stores, which Halfords said saved customers 19 seconds per transaction on average, while employees in every store now have access to laptop computers to more easily undertake their training programmes.

CEO Matt Davies said in this week's statement: "The goal of 21st century infrastructure is to ensure Halfords Retail has stable platforms, the right level of capacity for growth as well as the ability to materially improve both IT flexibility and our customers' experience."

The investment in technology and new systems helped contribute to an increase in overall costs, compared to the same period last year. Warehouse and distribution costs were up by 14.2% as a result of the enhanced 24-hour multichannel fulfilment offering launched last year, but support costs were only up 0.5%.

Last month, Halfords launched the first phase of its strategy to improve its online retail offering, which has seen the site provide a different tone of voice to better engage with consumers. A new homepage now reportedly allows customers to access product ranges in "far fewer" clicks than before, and online shoppers will now be faced with just four product 'verticals' – Cycling, Motoring, Sat Nav & Audio and Camping & Touring – when they logon.

Other changes include click & collect orders now being paid for in-store and developments around the online checkout in an attempt to reduce basket abandonment. Phase two of the eCommerce development is expected to be completed by the end of March 2014, bringing social network interactions and upgraded 'My Account' functionality.

Online revenues grew by 16.9% year on year and they now account for 11.5% of total retail sales, with over half of online sales from the cycling category. Liz Faulkner, consultant at retail research group Conlumino, said that with 88% of online orders now collected in-store, the retailer is showing strong progress in terms of multichannel integration.

"Halfords is undertaking its Getting into Gear programme with earnest," she added.

"Investment in key growth areas, service and staff training, store designs and layouts as well as supporting infrastructure, has begun to bear fruit. As such, Halfords looks to be set on a steadier course for the future."