Covid-19: Dunelm to invest in digital capabilities as online sales surge

Dunelm has reported online sales increased 85.2% in the 16 weeks from 8 March to 27 June (Q4 of FY20), and by 105.6% across April, May and June as it continued to rely on eCommerce during the Covid-19 pandemic.

The home furnishings retailer revealed that even since its stores have fully reopened, online home deliveries have been 30% of total sales, while click & collect has been 12%.

As a result of the shift to eCommerce during the crisis, Dunelm said it will invest heavily in its digital capabilities, expecting technology costs to rise by £8 million in FY21. It added it “will also be investing in supply chain capacity to meet the high growth ambition for our home delivery channels”.

The growth in digital sales was not able to offset the retailer’s store closures as a result of the Covid-19 lockdown in the 16 weeks to 27 June, with total sales falling 29%. In store like-for-like sales declined 49.7% in this period. Encouragingly, total sales in June grew 20% year-on-year, which Dunelm puts down to a number of factors including “pent up customer demand”.

Nick Wilkinson, chief executive officer at Dunelm commented: "The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business. This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers.

“There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment."

In May, Dunelm announced it was rolling out a contactless click & collect service across all its UK stores. And last month, it began trialling a virtual shopping service for those customers who are still shielding or are still uncomfortable about the prospect of entering stores.