Currys hails ‘strategic clarity’ of rebrand as profits grow

Claiming to have “completed the hardest yards” of its transformation, Currys is celebrating its decision to consolidate its four brands and become a “simpler, more focused business”.

Electricals retailer Currys credits the greater “strategic clarity” afforded by its decision to consolidate under one brand for helping the business drive growth and “successfully” navigate the pandemic.

The brand recorded a strong performance over the first half of its financial year to 30 October, with group pre-tax profits hitting £48m – up from £45m in 2020 and a loss £86m in 2019. Recording “strong” UK market share gains, the business claims to have mitigated the industry-wide supply chain crisis.

In October, Currys PC World and Dixons, alongside mobile phone retailer Carphone Warehouse and service partner Team Knowhow, were all brought under the Currys brand. Explaining the organisation has put its weight behind the single brand strategy, CEO Alex Baldock describes Currys as a “simpler, more focused business”, which has “completed the hardest yards” of its transformation.

“We’ve had a strong first half of the year. We grew colleague engagement and customer satisfaction, gained market share and stabilised gross margins in the UK, grew profits and generated strong cash flow,” says Baldock.

“Technology is now more important than ever to people’s lives, and we’re best-placed to make the most of that.”

Omnichannel is a key focus for Currys. Over 60% of customers buy products both online and offline, with the digital business growing 54% in the half year compared to two years ago.

In the UK, three-quarters of traffic to the Currys website comes from “free or direct sources”, with traffic through pay-per-click falling by 23% year-on-year. The brand says this illustrates its ability to drive online traffic at low cost, which will be enhanced by the move to one Currys brand.

Most customers buy tech through both online and stores, our sweet spot.

Alex Baldock, Currys

The retailer claims its strong two-year growth online has been driven by an expanded range, better pricing and an easier customer experience. The reopening of physical retail, however, caused online sales to decline compared to last year as customers shopped in store.

Baldock describes the intersection of online and offline as the Currys “sweet spot”. The business, for example, pools stock online and offline, so store staff can sell products from the online range. Demand for this service is up 59% compared to pre-Covid.

Customers have also taken advantage of the order and collect service, which accounted for 18% of online sales during the period.

Currys claims its online face-to-face video service, available to customers 24/7, has yielded higher customer satisfaction, stronger conversion and larger average order values compared to unassisted purchases online.

The business delivered the first performance upgrade to its website in October, including the rollout of the new Currys branding, enhanced personalisation and easier navigation. Further improvements are expected in early spring.

Prioritising loyalty

The Currys transformation agenda appears to be paying off. The retailer’s NPS score has improved by almost five points compared to two years ago, with satisfaction across almost all parts of the customer journey up materially compared to last year. Currys does, however, admit “a lot of work” is needed to fix customer pain points.

“We’re showing that in technology retail omnichannel wins. Yes, more customers are shopping online and our hard work to build a strong online business has seen us thrive here,” says Baldock.

“But most customers buy tech through both online and stores, our sweet spot, where we’ve worked hard to build on our strengths. That’s paying off.”

Some 80% of UK households are existing customers, but only 30% of their annual tech spend is with Currys, which the company regards as an opportunity for growth. The retailer plans to achieve growth through its use of data, credit selling and the rollout of a new loyalty scheme.

Currys rebrand: Four brands become one as it ‘invests hard’ in simplified proposition

Launched in October, the Currys Perks loyalty scheme has enrolled the third of UK households for which the business already had marketing permissions.

The push for a UK loyalty launch was inspired by the brand’s Customer Club scheme in the Nordics, whose members contributed 45% of revenue in the region. There were 6.3 million members of Customer Club at the end of October, a 47% increase from last year.

The brand has also invested in improving its staff experience through training, tools and incentives, as well as a focus on enhancing colleague wellbeing. This has resulted in a staff engagement score of 77, two points ahead of the company’s global benchmark and four points ahead of retail benchmarks.

Currys anticipates challenges from the spread of the Omicron variant, although it expects to be able to cope due to investments made in the business.

“Our market has been softer over recent weeks and we may face into further headwinds from Omicron and associated restrictions, but the stronger business we’ve built can ride out both the industry-wide disruption to supply chains and bumpy demand,” says Baldock.