Analysis: How Debenhams put multichannel centre stage

If you’re one of the longest-standing retail brands in the world, you could arguably be forgiven for pining for the olden days and turning your nose up at digital progress.

Debenhams, however, is doing the opposite. The 234-year-old retailer has been forward-thinking, keen to respond to – and in some cases pre-empt – changing consumer behaviour and desires.

It was an early adopter of the internet, launching its website in 1996. As for smartphones, according to Debenhams.com director Simon Forster, when the retailer asked its customers two years ago what they wanted from an ecommerce business, they actively did not want mobile. He says: “It was research that we just didn’t want to hear, so we produced the first iPhone app for Debenhams, which paid back in a matter of weeks.”

And when the retailer asked its customers the same question the following year, mobile was in the top 10 priorities. “When something is changing as quick as this, you don’t just focus on what is available now, but anticipate what sort of things are going to be important,” Forster maintains.

Support from management

Releasing apps and mobile-optimised sites are just a part of a far-reaching and multi-pronged multichannel strategy, but to be able to make those decisions and act on them with confidence, progress has to be endorsed and driven by the top management.

Just over three years ago, Debenhams’ top brass, championed by now chief executive Michael Sharp, decided to put multichannel at the forefront of the retailer’s strategy. “It had always been an aspiration, but now it is a key part of the strategy,” says Forster, who was brought in to execute the investment. “It was all about being able to see that the customer was changing their buying habits, and unless the company really sees it as a focus for the board, it’s difficult to get momentum for something that involves so much change.”

Since then, the website has gone from a total turnover of about £50m to more than £300m, the retailer has rolled out in-store kiosks and wi-fi across the estate, and the multichannel team is becoming increasingly integrated into all areas of the business – from the retail teams, to buying, marketing and of course IT.

For example, Debenhams has recently implemented a change in how sales are allocated. Multichannel sales are now attributed to individual shops’ retail teams, not only if placed in store, but also where online sales are made within a relevant post code.

In the past six months there has been significant international expansion online. Debenhams now ships to 67 countries and it launched a dedicated German-language website in September.

Forster has no doubt that multichannel has gone mainstream, pointing out that while two years ago the average online customer was 31 years old, today the average is 41 – the same age as the customer in store. “While the customer already sees these channels as joined, our job is to make sure that we see them as joined together,” he says.

As part of that joined-up thinking, Debenhams is also stepping up the roll-out of its ‘endless aisle’ concept that allows online customers to buy any product available anywhere in the business including from store stock rooms.

The retailer is in the process of extending the initiative so that products can be picked from the shopfloor as well as the stock room. “It’s great from a point of view of customer service – that they can get the stock wherever it is, but it also gives us an idea of how big demand really is,” says Forster. And that, in turn, can inform buying decisions, he adds.

The biggest challenge of endless aisle is that the service needs to be as good as delivery from a central Warehouse, Forster points out, adding that the retailer has appointed dedicated staff to the venture. “You can’t be half-hearted with these things, because you end up with bad customer service,” he adds.

The roll-out has meant that customers now have 33% more choice online at any point in time than even Debenhams’ biggest store, on Oxford Street – at the smallest stores, it’s five times as much choice.

Growth of mobile shopping

It is mobile, however, that is effecting the most seismic of shifts in retail, and Debenhams is continuing to develop the channel. “We believed as a business that mobile was going to be fundamentally where the customer was going to start to evolve to,” says Forster. Last year, 6% to 7% of Debenhams’ online visitors came via mobile, today it’s nearly 30%. At 3.5 million visits a week, it’s a sizeable number.

The installation of free wi-fi in all stores supports that belief in mobile. “Customers are using their mobiles to shop and research more and more and expect to be able to connect in the stores,” says Forster. “Wi-fi is also there for the future. When we see 30% of our customers come through mobile
now, it means that in a short period of time most of our online visits will be through mobile, so we need to think about mobile first rather than as a
secondary thing. It’s an investment in whatever innovations we’re going to see in mobile – certainly none of them will work if you can’t connect.”

But through the whirlwind of innovation, keeping a clear focus on the customer is what marks a successful multichannel strategy, believes Forster.

“The most important thing is to understand that our customer is not interested in technology,” he says. “She is only interested in the product and the brand and the service. So any innovation that we look to develop has got to be with the view of whether this is going to deliver a better experience for our customer. Because new technology in itself is not going to do it.”