Mobile and online drive Shop Direct growth
Shop Direct has released its full-year figures today, showing increased sales of £1.93bn.
It’s the fifth consecutive year of record sales and profits at the Merseyside-based group.
Sales have been driven by Very with £1.26bn sales (up 14.6%), leading to an underlying profit before tax growth of 10.2% (£160.4m).
“We’re pleased to report our fifth successive year of record sales and underlying profits. Once again, Very and m-commerce were the big drivers of our growth,” explained Alex Baldock, group CEO at Shop Direct.
“Our fashion performance stood out in a volatile market as we brought even more famous brands within reach of our customers. Spotting the athleisure trend early boosted sportswear and V by Very became an £150m brand in its first full year.”
Mobile devices accounted for 69% of online sales, with smartphone sales rising to 53%.
The MyVery app, which added finger print authentication in July 2016, was responsible for 32% of the brand’s mobile sales - up from 21% last year.
The Group has invested heavily in big data and machine learning and Baldock said that this would continue in the coming year. This would mean more mobile personalisation and working with Google and Facebook to identify the company’s “most valuable customers” to serve relevant advertising.
It also plans to apply machine learning to identify customers who are exhibiting signs of lapsing and predicting when someone may run out of a product they’ve previously purchased.
“Our long-term investments in digital, data, personalisation and Very are coming good. And our obsession with winning the ‘three-second audition’ on smartphones also continues to pay off. We’re delivering one of the most relevant shopping experiences on a 4.7-inch screen, with our five-star apps, digital marketing expertise and leadership in personalisation,” he added.
“Our customer already loves the upgrade she gets from our famous brands plus credit, but this business is still nowhere near its full potential. Using personalisation, we’re striving to be the easiest and most inspiring place to shop.”
In 2018, Shop Direct plans to increase artificial intelligence for customer service chatbots and credit decisions.
Later this financial year, it will launch an AI-powered “natural language” version of its chatbot within the MyVery app, which can answer 32 different types of customer query.
Ultimately it plans for the “Very Assistant” to develop into a personal shopper:
“Artificial intelligence is already driving results for us and we’ll soon launch one of UK retail’s first AI-powered chatbots for customer service. Longer term, we believe AI will bring scale to personalisation so digital retailers like us can be every bit as personal as stores. Very Assistant 2.0 will be another step closer to us democratising the personal shopper,” said Baldock.
“We don’t expect the economic backdrop to get any easier, but we’ve started our new financial year in line with expectations and are confident of delivering another record year.”