Home improvement retailer Wickes says long-term marketing efforts to broaden its brand appeal are starting to pay off, as it reports an increase in profits despite what it describes as a “challenging” year.

Expanding from its traditional customer base of local builders and tradespeople, Wickes has been looking to appeal to a younger and more female customer base, with “proactive marketing” efforts designed to target these demographics.

It says it has done this by developing rich online and social media content to help develop DIY skills and to bring DIY activities to life in a more relevant way for these audiences.

This has led to a significant increase in female customers over the past four years, rising from 16% in 2019 to 27% in 2023.

Wickes also credited its pioneering segmentation work using AI machine learning for “driving significant revenues” in 2023.

Its Mission Motivation Engine (MME) identifies certain ‘missions’ prospective customers might be about to embark on based on in-store and online transactions along with search, browsing, engagement and third-party figures, to find patterns in the products and services customers use together, which then informs its communications. When a shopper searches for a paint brush and then dust sheets, for example, the tool segments them under ‘room renovation’. 

The retailer says it now has a “comprehensive suite of MME-led programmes of marketing emails and app notifications, all of which are optimised for timing, audience and content for our different customer profiles, with incrementally measured against control groups”.

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The model, which was first introduced in 2022, delivered £7m in incremental revenue in its first six months, leading to it winning multiple Marketing Week Awards in 2022, including the coveted Grand Prix.

And it has continued to deliver a “big commercial upside” over the past 18 months, Wickes CMO Gary Kibble told Marketing Week last week.

It has also been investing in technology to improve its digital fulfilment offer, which led to the rollout of its 30-minute click-and-collect service, which has resulted in a 6.7% growth in these transactions this year and “record” customer satisfaction levels.

Wickes said today it plans to invest further in its digital capabilities, to improve the multichannel shopping experience and better engage customers.

Physical stores

Wickes is also investing in its physical stores. It refitted 11 stores in 2023, with 77% of the network now in the new format. It opened three new stores last year and closed four, meaning its current estate stands at 229, with plans to reach 250 in the medium term.

The retailer’s TradePro membership scheme, aimed at its traditional trade customers, enrolled 135,000 new people during 2023, for a total of 881,000 members. As well as a 10% discount on all spending, members benefit from the 30-minute click-and-collect service for products and materials.

Meanwhile, Wickes has also agreed to acquire a controlling stake in the parent company of Solar Fast, a solar panel specialist. It has identified increased consumer interest in alternative power sources as utility costs have risen.

On a call with investors this morning (19 March), chief executive David Wood said the solar sector holds promise but includes a marketing challenge.

“Marketing acquisition costs are quite significant in that space, as you would expect. One of the things we want to bring to that business is an opportunity to acquire customers in a more organic fashion, whether that is through what we do in stores or what we do online, or through our email and social channels,” he said. “An important distinguishing factor for success in that market is going to be marketing acquisition at scale.”

In the 52 weeks to 31 December 2023, Wickes achieved profit before tax of £41.1m, up from £40.3m the previous year, despite revenues falling by 0.6% to £1.6bn.

The retailer noted that consumer appetite for larger purchases is still restricted due to cost of living challenges, meaning a reduction in design and installation projects in homes. In common with other retailers, Wickes has faced increases in the National Minimum Wage, and higher business rates.

“This has been another year of strong progress for Wickes. Our robust trading performance, targeted investment programme and disciplined cost control have delivered profits ahead of expectations,” Wood said.

A Q1 trading update is due to be issued in May.