Health and wellbeing retailer Holland & Barrett is in the thick of a transformation that it embarked on two years ago, and its latest results show the hard work is paying off.
In its second consecutive year of double-digit growth, sales increased 10% year on year to £884.5m, while gross profit grew to £524m compared with £476m.
Holland & Barrett chair Alex Gourlay tells Retail Week that he is “really proud” of the results due to the level of change it has undergone to achieve this.
“I believe you should respect the past, understand today, and then plan for tomorrow,” he explains.
“When I was fortunate enough to be asked to do the job, I recognised that a lot of change was already underway.
“One is the science-led approach as you can’t claim to be a wellness or healthcare company unless you really look at all aspects of the proposition that you’re selling.
“Second was this standard setting for customers and I think the company is continually setting higher standards and you can see that in our customer service scores.”
He teases that “the best is yet to come” as there is opportunity across online and digital, and the new financial year promises to be strong with “revenue growth similar to the last two years.”
Investments in digital
As more retailers strive to have both online and physical presence, Gourlay emphasises that you’ve got to be wherever the customer wants to be.
“We’ve got to absolutely be the most convenient, have the most expertise, and offer the best value we can, which wins loyalty and the ultimate relationship,” he says.
With customer centricity at the core of Holland & Barrett, the investment into digital is the right step, as Gourlay says the growth of online is now higher than stores.
Sports nutrition is doing particularly well for the retailer online, leading the retailer to launch 80 new products in this category. Food sales also saw a 34% increase due to customer interest in health products.
Tapping into social media trends also helps to understand what’s currently popular with consumers, whether that be a new superfood, health supplement, or an international product that is due to take off in the UK.
“It’s not about selling products, it’s about selling behavioral change”
One of the biggest trends to emerge in the last few years is preventative healthcare, and Gourlay explains that there are a lot of “unmet needs” for customers who are looking for ways to improve their health.
“One of the things we’re testing is the app called H&B&Me, a longitudinal health platform where you get an analysis of your biological age.”
Customers can get health tests and improve their sleep, habits and emotional wellbeing, along with expert advice, personalised goals and recommendations.
“It’s pretty accurate because it’s based on lifestyle behavior,” he continues.
“Soon there will be blood tests and other possibilities, and we’ve discovered that a lot of customers really like it because it’s a fun thing, it’s a serious thing, but more importantly, you move them into taking action.
“It’s not about selling products, it’s about selling behavioral change. It’s really deepening our relationship with customers in an area where they’ve got a lot of interest.”
Store transformation
Holland & Barrett customers tend to shop both in-store and online, and the retailer has been upgrading its stores to reflect the turnaround of the business.
“We’ve had a lot of feedback that people are noticing our stores because they’re more modern, inviting, and attractive,” Gourlay reveals.
Around 60% of the stores were upgraded at the end of the financial year and the expectation for the current financial year is to get to 90%.
“The final 10% tends to be areas where we think we’re slightly wrong about the location and we need to move, or where we may have a landlord who’s been a bit difficult with us,” he says.
He adds that he is committed to “refurbishing them all” as well as introducing new stores, as he wants to keep investing in the high street.
The retailer also sees a lot of opportunity in travel and transportation formats around London, along with smaller stores with “tighter offers and more pickup lines”.
Gourlay doesn’t divulge too much information about potential new experience stores like the one in Cardif,f which features self-checkouts, a wider range of beauty, a Randox healthcare service with private consultation rooms, a wellness hub with experts on hand, and a studio for yoga, pilates, and meditation.
“We won’t commit to that until we see the overall performance of the Cardiff store, though we have been pleased so far. It’s more about moving some of these experiences and certain caches into the main estate.”
Going forward, Gourlay and the team want to keep focusing on things that work really well, such as personalisation, the H&B&Me app, developing loyalty programs to become competitive, more partnerships, and more products.
“You’ll see us continue to develop and increase the quality of our scientific, efficacious ranges.
“We also want to localise the offer a bit more. We have small stores, and we want to make it easier to shop through missions and provide the right products in the right form for these customers.”
He adds that the team is also working on explaining to customers who the “new Holland & Barrett are” from a marketing point of view, but the focus right now is on the customer proposition.
With plans for new formats, further development online and in-store and continued science-backed innovations, Holland & Barrett is on its way to be completely unrecognisable from what it was just a few years ago.
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