Shop Direct profits surge after focus on personalisation and big data

Shop Direct said “a successful move to being a 100% digital retailer and better discipline across selling, costs and credit risk” also helped propel earnings.

The retailer said in the year it made some “bold decisions” in its aim to become a pure-play etailer. They included closing the Littlewoods catalogue and shutting “legacy” brands Woolworths, K&Co and Isme. “Being a pure-play retailer has given Shop Direct the freedom to invest in its digital transformation, while at the same time allowing it to return a profit for the third year in a row,” it said.

Shop Direct boss Alex Baldock said: “Being online-only means more mobile innovation, especially in personalisation where we aim to offer each customer an experience as unique as she is.

“We’ve tailored her online experience, including the marketing that brings her in, the online shop she then enters, and the way we engage with her after she’s bought. Our investment in big data and technology has started to pay off and is making these new levels of personalisation possible.”

Group sales advanced 3% to £1.8bn. Shop Direct’s flagship brand Very delivered sales growth of 21.1% to £850m. Very’s sales via mobile devices increased 51% and represent 59% of total online sales – 17 points ahead of the market, Shop Direct said. Web traffic has now broken the 1 million per day mark.

Baldock said the etailer has made a “strong start to the new financial year”. He said: “We’re in good shape for the peak Christmas period, and we expect growth, discipline and transformation to drive another record year.”

Baldock added: “Very.co.uk and mobile have been the outstanding performers for us. We’re working hard to keep our lead in m-commerce, and Very is now the UK’s fastest growing department store. This is now a disciplined business too, in the way we sell, spend and lend, which makes for a more profitable and resilient Shop Direct.

“We passed some important milestones last year. We’ve transformed quickly to this more focused business – only three years ago, nearly three-quarters of our sales were from catalogue customers.

“We’re also more focused on Very.co.uk and Littlewoods.com, made possible by the closure of our three smaller brands.

“That said, we’re nowhere near the finished article and we’ve only scratched the surface of the full potential here. The competition is ferocious so we must and will continue to invest heavily in our digital future, and keep up the pace on our transformation. These are exciting times for Shop Direct.”