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Taking direct action

Shop Direct Group’s retail director is leading a digital charge as he aims to grow its Very, Littlewoods and Isme fascias.

Not making decisions [and] being bureaucratic will kill a business. Let’s make decisions, be fast, be quick, let’s use as much data as we can. [Otherwise] three months later someone else has done it, has already seen that trend, is already buying into it, and you’re late to the party,” Gareth Jones, group retail director at Shop Direct Group tells Drapers as we walk through the home shopping giant’s expansive open-plan offices in Speke, near Liverpool.

Decisiveness was a quality drummed into him by former boss and mobile phone magnate John Caudwell, whom he worked alongside after winning BBC2 reality show Trouble at the Top - a forerunner to The Apprentice - in 2001 at the age of just 22. With a track record at the Caudwell Group that includes stepping up to lead the launch of Phones4U Direct in 2006 and subsequently growing the business to contribute more than 25% to the group’s profits, that decisiveness has propelled Jones throughout his career to where he is now - at the helm of one of the UK’s leading multichannel retailers.

Sitting in the etailer’s research and development lab - known by employees as ‘the greenhouse’ - Jones explains that one of the first things he did when he joined Shop Direct was to reduce its portfolio from 21 fascias to nine, in order to avoid “duplication”. At present he is tasked with growing the three “power brands”: the Very, Littlewoods and Isme fascias.
In particular, Very and Isme have been earmarked for growth, with plans to increase the own-brand offer in each. Very achieved a 15% sales increase to £350m for the year to June 30, 2012, with current sales growing 15%, while Jones reveals that Isme saw a sales increase of 30% in the same period to £50m, with sales up by a similar amount.

Trend-led etailer Very, and its brand Love Label, have been a hit among its target audience of 25 to 35-year-olds, while Isme, and its own-label range Savoir, is plugging a GAP in the mature fashion market for clothes cut for a 50-plus shape. “This is a market that is massively under-served,” says Jones. “The two biggest retailers doing this are Marks & Spencer and N Brown. M&S has by far the biggest market share but it rarely talks to that mature customer singularly. It’s gone a lot younger.”

Verdict Research analyst Kate Ormrod echoes this. “The 50-plus female consumer group is definitely under-served in the UK clothing market,” she says. Verdict forecasts the 45-plus womenswear market to grow 25% to £14.2bn by 2016 - outperforming the overall UK clothing market. Looking ahead, Ormrod expects to see retailers place greater emphasis on the increasingly attractive mature market.

In fact, Savoir has been so successful that Jones reveals plans to extend it into formalwear in the next 12 months. He describes third power brand Littlewoods as an “incredibly important” part of the business, but admits that “it’s a weekly payment model and we don’t see huge amounts of growth in that marketplace today”.

Instead, the business is focused on digital. Mobile is “hugely” significant, says Jones - in the past six weeks it accounted for up to 30% of Shop Direct’s traffic, with conversion around half that, and, contrary to Jones’ expectations, it is similar across both Very and Isme. “We’ve been gobsmacked by the 50-plus customer [use of mobile],” he says. “I mean, it’s slightly lower but we’re talking a few percentage points, and that really has taken us by surprise. It’s almost as if some of them haven’t converted to online via desktop, but actually now they’re willing to go directly to mobile.”

Shop Direct plans to further boost its digital channels with a company-wide programme called Connected to ensure a seamless, device-agnostic journey. In other words, no matter which device a customer uses, they will be recognised by their log-in and IP address. “When you start jarring that journey, customers really start to lose interest,” says Jones. “The industry leaders here are Amazon and eBay, which create those absolute seamless journeys across all devices: an app, a mobile site or desktop.”

Antony Eden, head of digital marketing at young fashion etailer, agrees. “The more simple it is for the customer to seamlessly transact with a brand across multiple channels the better,” he says. “Anything that is not closely integrated puts barriers in front of the customer, ultimately impacting upon the transaction and the perception of the brand.”
Jones says a mobile-optimised website is more important than an app, which he says is about engagement and not sales. However, he does reveal plans in that area. When Drapers asks if it’ll be a style app for Very, he narrows his eyes and smiles, saying “something like that”, before adding: “That’s exactly what the Very customer wants.” And Isme could be next. “This won’t be for Christmas, but it may be for the future that Isme looks at an app that talks about clothing fit.”

Eden agrees, and is set to launch its own mobile-optimised website later this month. “A mobile-optimised site is more important to us than an app,” he says.
Nick Farrington-Darby, m-commerce manager at footwear retailer Clarks, says while mobile sites are likely to deliver more traffic due to the low barrier to usage, “they are unlikely to engage, will be used less often per customer and are likely to experience a higher level of customer disloyalty, as all your competitor sites are available via the same browser”. He adds: “The downloading of an app demonstrates a higher level of brand affinity than the casual browser on a mobile site, so it’s right to reward those customers with an engaging experience.”

Connected will kick into action in the next few months, with 27 improvements to the customer journey by mid-November, half of them being for mobile, from small things such as enabling customers to save a change of address, to initiatives such as an online virtual fitting room, provided by Metail, which will go live early next month. “We’re going to trial it on one brand, we haven’t decided which one,” says Jones, before confessing: “It probably will be Isme.” Clearly, he’s in a sharing mood.

Shop Direct’s efforts to improve its online experience are clear to see in its new 8,400 sq ft fashion studios (which complement its existing 12,000 sq ft still life studio), overseen by creative director Mark Woods, formerly of Debenhams. While they cost the business £1m, the retailer has gone from shooting 30% of its product in-house to nearly 100%, photographing and videoing 120 styles a day. As a result, Shop Direct has already recouped the investment, says Jones.

Known for its clever use of data, Shop Direct also uses social media to learn about its customers, with a presence on Facebook, Twitter, Google+ and Pinterest. However, for Jones the medium is about engagement and service, not sales. “One thing it’s definitely not is F-commerce. Customers just don’t buy it. So you’ve just got to use it for what it is - building engagement and advocacy.”

Rival N Brown Group decided to open stores under its plus-size Simply Be fascia as part of its multichannel strategy, and Martin Newman, chief executive of ecommerce specialist Practicology, expects more to do the same, citing the popularity of click-and-collect as a primary driver. “Each channel has a halo effect on the other so there are strong commercial reasons for a multichannel approach,” he says.

However, Shop Direct doesn’t plan to take the bricks-and-mortar route, though Jones does reveal: “There are some opportunities to use bricks-and-mortar space to talk about our brands and our digital experience.” Those “opportunities” involve placing 3D posters in vacant shop windows, so customers can interact with the business using their mobile phones, view clothes and make purchases. “We’ve got some very firm plans in the next three months to do that. Highly likely to be Very,” laughs Jones, adding: “I’m saying way too much here.”

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