Next, often acknowledged as a barometer of how the high street is faring, said 2017 was its “most challenging year” in 25 years. Posting an 8.2% drop in operating profit year-on-year to £759.9m, total group sales dipped by 0.5% to £4.1bn during the period. But how does it intend to claw back sales during 2018? Drapers takes a closer look at Next’s 2017 annual report.
Opening profitable new retail stores
Rather than retract from bricks and mortar, Next said it plans to open profitable new retail spaces, maintaining the company’s payback and profitability hurdles of 15% net store profit (before central overheads) and payback on net capital invested in 24 months.
Launching new brands through Lipsy & Co
Next said it will continue to develop its Label business through the addition of new key brands, particularly through its subsidiary Lipsy & Co. Lipsy & Co offers third-party young fashion brands, which it sells alongside Lipsy. The branded offer now accounts for 34% of Lipsy’s total sales.
Website redesign and customisation
The retailer said it is set to redesign the look and feel of its website, which will include faster and simpler registration and checkout. Customisation features will also include a new CMS system for the homepage, allowing a deeper level of personalisation.
Roll out of Next Unlimited and Precise delivery
Next said it plans to roll out ‘Next Unlimited,’ which will allow customers to pay £20 for a year’s unlimited next-day delivery, anywhere in the UK and Northern Ireland. It will also launch a Precise delivery service, offering a one-hour delivery slot (selected at check-out) for a £2 premium.
Launching of overseas mobile website
The high street giant said it will launch an overseas mobile website during 2018. Currently mobile users overseas can only access a desktop website on their mobile devices. It said 70% of its overseas customers (by sales value) will have access to its mobile site by August.
The retailer said it aims to target its advertising much more effectively, this will include preventing recruitment advertising being shown to existing Directory customers (where they are recognised through a cookie). The retailer said it also wants to personalise adverts to its existing customers based on their purchasing history, recent browsing and abandoned baskets.
Re-branded credit offering
Next said it will be re-branding and promoting its Directory account as ‘nextpay,’ along with developing new, more targeted, credit offers.