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Mobile drives growth at Shop Direct

Etailer Shop Direct has announced its fifth consecutive year of record sales and underlying profits, as mobile sales soar to 69% of all online orders.

Group sales at the company, which owns Very.co.uk, Littlewoods.com, VeryExclusive.co.uk and LittlewoodsIreland.ie, increased by 5.6% on a like-for-like basis to £1.93bn for the 12 months to 1 July 2017 year on year, driven by sales growth of 14.6% to £1.26bn at Very.

Underlying profit before tax was up 10.2% to £160.4m, while group gross margin was maintained at 40.8%.

Recruitment of new credit customers increased by 7.6% overall, and by 14.1% at Very, following better targeting of customers.

Exceptional items for the year came to £121m, including £112m in regulatory costs resulting from an increase in customer redress claims across the market. Shop Direct said this figure is estimated to cover all claims up to the deadline of August 2019.

Sales on mobile devices, including smartphones and tablets, were up 7 percentage points to 69% as a proportion of online revenue. Sales via smartphones made up more than half, 53%, of online sales for the first time, up 10 percentage points compared with 2016.

The MyVery app drove 32% of all Very’s mobile sales, up from 21% in 2016.

During the year Jigsaw, Hackett and Victoria Beckham joined Shop Direct’s roster of more than 1,800 brands. 

Clothing and footwear sales grew by 6.4%, driven by a 21.8% uplift in sportswear and a deepened product range across kidswear and menswear.

Later this financial year, Shop Direct will launch the artificial intelligence-powered, “natural language” version of its customer service chatbot, Very Assistant, within the MyVery app. The conversational user interface can answer 32 different types of customer query, and recognise more than 4,000 written phrases and respond accordingly. Shop Direct said its long-term vision is for Very Assistant to develop into a personal shopper for every customer. 

In 2018, the company will also apply artificial intelligence to its credit decision-making process to produce faster, more personalised outcomes for customers, and better credit decisions and risk discipline for the business.

Alex Baldock, group CEO at Shop Direct, said: “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 a £150m brand in its first full year.

“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. 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.

“Artificial intelligence is already driving results for us. 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.

“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.”

 

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