Shop Direct to use real-time personalisation to power profit growth

The retailer saw sales rise 23% at Very, making it the company’s largest brand with £700m in annual UK sales, more than twice the volume of Asos in the UK. Overall, sales were up 3% to £1.74bn while pre-tax profits almost quintupled to £40.4m in the 12 months to 30 June.

Speaking to Marketing Week, Shop Direct’s deputy chief executive Gareth Jones said “star performer” Very had benefitted from an increased focus on using customer data to improve the online customer experience. So far, the firm has introduced personalisation to the home page and is running a test with 10 per cent of its traffic to display tailored products based on their browsing and buying habits.

The challenge now, he said, will be to do that at scale and in real time so that when customers click on a specific product the retailer can personalise what they see as they browse.

“Where we are placing bets on the future is doing testing at scale. There is a hell of a lot of complexity to do this real time so that when we see customers clicking on certain dresses we can tailor in real time and serve up curated personalised content for customers,” he added.

Jones said that when Very gets personalisation right it sees an uptick commercially, in terms of an uplift in sales and volume, and in customer experience, with customers telling the retailer it is faster and easier to find products to buy.

That is why retailers are increasingly focused on personalisation. Asos has already stated its intentions to improve how it tailors content, with plans to roll out a recommendation feature next year and looking at whether to expand a test of its points-based loyalty scheme.

Jones said Very has no intention of introducing a loyalty scheme, however, saying customers have told the company “loud and clear” that they would rather see investment ploughed back into the proposition and getting the best value possible from their regular purchases.

Shop Direct is now planning an extension of its Very brand with the launch of Very Exclusive at London Fashion Week in February next year. The site will offer 150 luxury brands, including Marc by Marc Jacobs, McQ and Karl Lagerfield, with the aim of widening the appeal of Very to a new customer set.

Jones said the marketing for launch will focus on content and getting the site talked about by fashion bloggers. Marketing investment in both Very and Very Exclusive will continue to rise next year, while Shop Direct will put less resource behind its heritage brand Littlewoods, which saw sales decline in the period and which Jones said is attracting fewer and fewer new customers.

That meshes with Shop Direct’s wider strategy to transition from physical to online retail. In the year, the retailer says 84% of its sales were completed online, with 48% of those coming from mobile. For its first quarter both those figures have increased, to 86% and 52% respectively.

However, there are plans to trial pop-up shops for some launches, although these will be pure marketing plays rather than a sign of a move into physical retail.