Shop Direct is focused on UK market, group retail and strategy director, tells BRC

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Shop Direct: digital transformation

Shop Direct: digital transformation

Shop Direct, the online retailer which operates the Very, Isme and Littlewoods brands, is focused on the UK and has no current plans to expand internationally, according to Gareth Jones, group retail and strategy director.

Speaking at the BRC Omni-Channel Retailing event yesterday (4 March 2014), Jones said: “We have absolutely no plans to go international at this stage. We are very focused on the UK market and believe there’s a hell of a lot to go after.”

Presenting the retailer’s digital transformation, Jones said change was underpinned by its point of difference – to make good things easily accessible to more people.

That’s our purpose, said Jones. “That’s why if we are gone tomorrow our customers would miss us and our employees would miss us.”

Jones said Shop Direct was focused on three clear sectors for growth: a younger segment, represented by the Very brand, which is now worth £500m in sales and growing at 20-30%; a striving families segment, featuring the Littlewoods brand; plus a mature 50+ market, represented by Isme, the fastest growing segment online.

Customers’ viewpoint

Jones presented Shop Direct’s strategy to transform into a world class digital retailer, which included a target to generate 70% of its business online by 2010. In 2013, it reached 84%, he said.

The first test of the online platform in 2010, meanwhile, which put the customers’ opinion at the core rather than the “highest paid person’s viewpoint”, delivered £11m in sales, said Jones.

Jones said Shop Direct now tests up to 35 ideas a month via qualitative and quantitative testing, research groups and lab-based user experience studies.

These are designed to identify pinch and pain points in the customer journey, he said.

Help with product sizing, for example, has stopped shoppers from dropping out of the accessories pages because they are unable judge how big a handbag is, for example.

Similarly, multi-select functionality has been introduced on electricals along with features to reduce the number of clicks to perform a task.

Augmented Reality (AR) is also being explored in the furniture category, which has the lowest conversion rates online, said Jones.

New features will enable shoppers to measure and gauge product size and even feel the texture of the fabric on a sofa from a screen.

Developments like these are customer-led, he added.

Fail fast mentality

Jones said Shop Direct has developed a flexible, innovation strategy and the business in no longer fearful of change.

“It’s a different culture from the [legacy] catalogue business,” he said. “Our culture is fail fast.”

Of the 35 experiments on its site, at least one third fail, reported Jones. “Red is good,” he said. “We fail fast and move onto the next test.”

Despite growth in mobile, Shop Direct predicts that by 2018 other devices will have overtaken tablets, phones and PCs.

It expects connections to come from smart homes, cities and offices, for example. Understanding the pathway to conversion and loyalty across transactions will be key, said Jones.

Personalisation will be paramount, he added.

Jones said Shop Direct has a ‘“treasure trove of history” in terms of customer data and will use that to “power real time decision making”. Seven of its nine tests this year, for instance, have involved personalising the web and have been “mega successful”, Jones told delegates.