Shift To Online Benefits Shop Direct

Shop Direct, the retail group behind the Very and Littlewoods brands, has reported strong year end results as it continued to benefit from its move away from catalogue shopping to online-only.

In the year 30 June, the group’s underlying pre-tax profit jumped 43.6% to £150.4m on sales up by 4.3% to £1.86bn.  The period represented Shop Direct’s first full financial year as a pureplay digital retailer, having ceased catalogue production in January 2015.

Shop Direct said its strong profit increase was driven by 15.9% sales growth at its largest and fastest growing online brand, which became a £1bn-plus brand for the first time; expansion in mobile transactions, which now make up 62% of online sales; and cost savings.

Web traffic across the group’s websites grew by 12% to reach 1.2m visits per day on average (2015: 1.1m visits per day), with daily traffic from smartphones increasing by 42% to more than 638k visits.

Alex Baldock, CEO at Shop Direct, said: “2016 was our first full year as a pureplay etailer. Removing the shackles of the catalogue has been liberating, and has allowed us to invest in the areas that matter most to our customers – making their shopping experience easier and more personalised, particularly on mobile.

“This was the year our investments in technology really started to pay off. We’ve made big strides in m-commerce, big data and personalisation. But there’s a lot more to play for in these areas. In particular, we believe that artificial intelligence can change the game for us in data and personalisation. We’re deploying it already and are serious about going much further.

“We continue to gain market share profitably, and are on course for another record year of sales and profit. We’re confident that, if we stay true to our strategy and to what makes us special, we’ll continue to succeed.”