Bonmarché maps out major eCommerce and systems upgrades

Women's clothing retailer Bonmarché has mapped out a number of eCommerce and infrastructure developments for the 12 months ahead, following a challenging year for the business which it said was primarily caused by unseasonal weather conditions in the UK.

Chairman John Coleman admitted that the year to 26 March 2016 was "an unusually difficult year" with Bonmarché's customers "significantly influenced by weather", which for much of the reporting period "gave them little reason to make seasonal purchases".

Total revenue increased 5.3% year on year to £188 million, with store like-for-like sales edging up 0.7% and online sales growing by 3.6%. In line with revised expectations, profit before tax was £9.6 million – down from £12.4 million one year before – but a raft of investment plans have been announced as part of a wider modernisation programme at the business that are expected to generate long-term improvement in the bottom line.

What is Bonmarché planning?

Like many established retailers on the UK high street, Bonmarché is looking to refresh its look and improve the store experience for its customers. During 2015, the fascias of 140 stores were changed and a further 40 will be replaced during the new financial year, while other visual improvements to stores have included new window displays, de-cluttered till areas and smaller point-of-sale displays.

It is on the technology side where the business has arguably been most transparent about its plans, unusually for a listed retailer it has used a preliminary results announcement to name a range of the suppliers it is working alongside to help modernise operations.

eCommerce problems

Online sales represented 7.3% of Bonmarché's total sales, last year, which the company called "disappointing".

Outgoing CEO Beth Butterwick, who is set to become Karen Millen CEO later this year, said: "This has been a challenging year for our online operation, which only managed to achieve a £0.5 million increase or a 3.6% growth on the prior year.

"The weakest months were either side of our responsive site implementation in July 2015, and in December when we experienced weak trading following Black Friday, with customers having taken advantage of the plethora of discounts generally available around that event."

Butterwick expects the newly installed responsive site to deliver a better shopping experience when customers use tablet or mobile devices, and it is combined with the introduction of Attraqt's technology which has been installed to help the business effectively merchandise products for individual customers, based on their purchase profile history.

A website re-platform to Demandware,  is also under way, which will combine with an upgraded electronic point of sale (EPoS) store till system from Oracle's Retail J to facilitate an online gift card functionality and more aligned store and online price initiatives such as '2 for' and '3 for 2s'. Bonmarché is currently on the Venda eCommerce platform, which is now owned by NetSuite.

Bonmarché has also made the move to introduce ForeSee, an online mystery shopper tool that collates customer feedback on their journey experience through the website, similar to the customer satisfaction programme used in stores. Butterwick indicated that these separate customer feedback programmes will be joined up as part of a more coherent CRM design, as the business continues to modernise its IT systems and infrastructure.

Other notable changes online include the introduction of AB multivariate testing which the CEO said ensures customer preferences are taken on board when developing the eCommerce proposition, and an improved fulfilment service that enables Bonmarché customers a later next-day delivery cut off and the ability to track parcels.

EPoS and ERP

In last year's annual report, the retailer highlighted how it had experienced issues with a project to replace its EPoS system across the store estate, with Butterwick saying she was "disappointed" with delays in the Oracle project implementation, presumably due to disruption caused by Oracle's acquisition of Retail J provider Micros. This work has now restarted and the Retail J system is expected to be in place "by the end of the year", which is hoped will be beneficial to shoppers and the business, in terms of data being filtered back to head office.

The processes of eCommerce re-platforming and changing EPoS are no small tasks, but it does not end there. Bonmarché has also implemented a new HR system that it believes has resulted in a more agile payroll functionality, a working hour tracking tool, automated holiday requests and, in the future, an applicant tracking service.

This financial year will also see the company finalise a "discovery phase plan", with a view to replacing a 20-year-old legacy ERP system. Butterwick said that over the next several years, processes and systems will be modernised or introduced in merchandise and allocation planning, product information management, CRM and business intelligence.

A change programme team are in place to work with the company's existing IT support team, while the recently appointed independent non-executive director, Mark McClennon, will help oversee the operation. McClennon is global vice president for IT at Unilever.

There are few areas of the business that have avoided a refresh, it seems, with Butterwick handing over the reins to incoming CEO, Helen Connolly, during a time of major systems restructuring.

Butterwick added: "Supporting our two main channels (stores and online) are a catalogue, TV shopping and a call centre to handle telephone orders.

"We launched an additional high summer catalogue last year, and the Ideal World TV shopping channel continues to provide exposure for the brand. A new telephone system introduced just before the end of the year will allow our internal call centre team to reduce the incidence of customers abandoning calls due to slow answer response times."

Honor Westnedge, lead analyst at Verdict Retail, offered a positive overview of the state of the business ahead of Connolly's arrival from her role as senior buying director at Asda's George clothing brand.

"Despite a weaker set of results following a tough H2, [Butterwick] leaves the retailer prepared for future growth due to a clear strategic and modernisation business plan.

"While a warm autumn reduced consumers' propensity to spend on seasonal items, full-year sales growth still outperformed the wider UK clothing market, and with sales of £188 million the value specialist held onto its market share of 0.5% in 2015."

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