The Very Group must address significant threat posed by Next, says GlobalData

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Following today’s release of The Very Group’s figures for the seven weeks to 24 December, FY2021/22; Kunaal Shah, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Against strong comparatives during Christmas FY2020/21 boosted by a national lockdown, the Very Group’s Christmas performance looks decent, however when compared to key rival Next there is cause for concern. Next’s full price online sales (for the eight weeks to 25 December 2021) rose 45% compared to Christmas 2019, while Very.co.uk’s sales grew 21.9%. Online full price branded sales for Next grew 85% versus two years ago while Very.co.uk’s sales of fashion and sports increased 17.7%, highlighting that the clothing giant is vying for share of the branded fashion market and Very.co.uk must act quickly to compete.

“While Very.co.uk’s standard delivery time is impressive at just one day, consumers can only order up until 8pm, while at Next consumers can order up to 11pm for next day delivery. Furthermore, Next’s Unlimited Delivery saver scheme appeals to consumers and encourages brand loyalty, for an annual fee of £20 with which most delivery options are then free, whereas Very.co.uk does not offer anything similar. Very.co.uk must look to at least match – if not better – Next’s online fulfilment proposition if it is to truly compete. The Very Group’s significant investment in its warehouse operations – including its automated Skygate fulfilment centre – has given it the platform to be able to prepare and dispatch consumer orders much quicker than was previously possible. Very.co.uk must now introduce same day delivery on relevant items such as electricals, to compete with Argos and Amazon, and further boost its popularity with shoppers.    

Very.co.uk’s wide product range has played a huge role in its success over the course of the pandemic and will enable the retailer to continue to perform strongly going forward. Electricals saw the largest growth against Christmas FY2019/20 (+28.2%), driven by an increase of 83.5% in gaming as consumers were able to secure PlayStation 5 and Xbox Series X consoles. Restriction-free Christmas celebrations drove the two-year 106.0% growth in its festive decoration assortment. While this category might not be the largest, it does highlight the benefits of having a wide product range with items such as Christmas decorations being perfect add-on purchases when consumers shop for other key gifting categories. The retailer must now ensure its focus is to grow the product categories – such as wellbeing and sports – which have increased in popularity during the pandemic and look to remain hugely significant in consumers lives.”