Next ups focus on customer service following ‘great year’

Next says it plans to renew its focus on customer service in order to maintain its strong sales growth after it posted a pre-tax profit of £695m that leaves it poised to overtake Marks and Spencer.

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Next ups focus on customer service following ‘great year’

Total sales for the year to January 2014 were up 5.4 per cent to £3.74bn while pre-tax profit increased 11.8 per cent. The retailer has credited its multichannel offering and improvements to its fashion range for the increase, while it also benefitted from a “steadily improving” British economy.

Sales at Next’s stores rose 1.7 per cent while its directory business saw a 12.4 per cent sales rise. Next has made a number of improvements to its online service, including introducing free next-day delivery to stores for customers who order before 10pm and improving delivery reliability to 98 per cent.

However, Next believes there is an opportunity to improve the in-store experience. The retailer says it has made changes to its recruitment, training and bonus schemes but believes there is still “a way to go”.

“If our customers were to be asked to rate Next’s service we believe many would say it was generally good but not consistently exceptional. We think we have an opportunity to improve both the consistency and quality of our retail customer service,” says chief executive Lord Wolfson in a statement.

Anusha Couttigane, consultant at Conlumino, says the secret of Next’s success is this focus on “frequent self-evaluation” to mitigate potential weaknesses. She also believes a commitment to taking more fashion risks will help maintain Next’s appeal.

She says: “Next’s dazzling full year results will come as little surprise to most people. The retailer continues to far outshine its peers in the British fashion market, growing steadily in both profit and popularity.”

Next’s sales growth are in contrast to rival Marks & Spencer, which continues to lose share in the fashion market. The latest figures from Kantar Worldpanel, reported by the Financial Times, show that its share of the total fashion market fell 0.4 percentage points in the 12 weeks to February 16, while its womenswear share fell 0.5 percentage points.

M&S is set to reveal its annual results in May, with analysts expecting pre-tax profits of £615m, putting it behind Next, and the 10th consecutive fall in sales of general merchandise – which includes clothing and homewares.

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