Boasting over 2,000 brands across home, fashion and electricals, The Very Group aims to help families “get more out of life” through its state-of-the-art supply chain and a strategy centred around convenience, flexibility and value. The Retail Week analyst team examines five ways the digital retailer is striving to become a “world-class” leader in its field.
1. Customer-centric strategy
An online pure player, The Very Group’s strategy is focused on supporting families to “get more out of life”. It continues to target three main pillars:
- Ease – offering a brilliant customer experience, from first click to receiving its products.
- Choice – curating a compelling assortment of products and services with market-leading payment options.
- Understanding – a focus on understanding its customers “better than anyone else”.
The group comprises Very and Littlewoods, with Very accounting for 83% of group retail sales in its most recent financial year to 2 July 2022 (2021/22). It has over 4.4 million active customers, delivering 50 million items a year.
The Very Group also drives significant revenue through its Very Finance business – a key part of its model – where customers can benefit from flexible payment options. Very Finance income rose 10.7% to £397.9m in 2021/22.
Without the overheads of an in-store proposition, the group has been able to focus its efforts on building its technological capabilities over the last few years to enhance its site and supply chain.
2. Payment options
As consumers grapple with falling discretionary budgets amid the ongoing cost-of-living crisis, retailers are looking at ways in which they can encourage customer spend.
High-street stalwart John Lewis’ chief executive Nish Kankiwala announced in August 2023 that the company was considering expanding Buy Now Pay Later (BNPL) initiatives to lower-priced items.
Very has already done that, implementing a range of payment options, including buying outright, splitting purchases into three payments or BNPL, through self-serve Very Pay.
However, mindful that its customers should not get into financial difficulty by over-extending themselves, Very also offers advice on its website. Customers can log any concerns on a range of topics, from mental health to financial difficulties, and access tips on how to save money.
Frasers Group has recently launched Frasers Plus – a flexible payments solution – and more retailers are likely to follow Very’s lead as customers become savvier regarding big-ticket purchases.
3. Best-in-class supply chain
Very’s 850,000 sq ft automated distribution centre at Skygate in East Midlands went live in March 2020 – just as the pandemic hit.
Skygate’s technology has delivered significant benefits for the retailer and its customers, with orders dispatched in as little as 16 minutes at its speediest, as well as returns processed in 30 minutes, and faster refunds.
The retailer said: “Faster refunds and making returned product available for re-sale more quickly will create an even better customer experience and support our continued growth as we head into the crucial Black Friday and Christmas periods.”
The facility also provides the group ample room to extend its product ranges and stockholding capabilities, which is particularly useful during peak periods.
Very extended its next-day delivery cutoff from 7pm to 10pm at Skygate, where orders are generally ready for dispatch within 30 minutes, compared with around four hours at its previous fulfilment centres.
In October 2021, Very launched a stockless fulfilment model with key brands Adidas and Reebok, later expanding with Lacoste, Quiz and Ann Summers, among others. The model serves to broaden the retailer’s range and extend availability without additional stock investment.
4. Enhanced technology enhances customer offer
Digital customer experience director Paul Hornby told Retail Week that the Very app accounts for about 45% of The Very Group’s sales.
By early 2024, the retailer plans to migrate most of Very’s app and website experience to its new platform, Skyscape.
Hornby said: “Skyscape will be the platform that powers all of our digital experiences for our brands. We’re trying to give customers a fresh, consistent, easy-to-use experience from the first visit on the site or app and we believe that’s what they’ll get.”
Improving user experience is a key part of Very’s strategy. It announced the launch of its virtual try-on experience for beauty users in early December 2022. Partnering with L’Oréal-owned ModiFace, the technology enables its customers to virtually try a range of make-up lines using augmented reality (AR).
Hornby said the group will be exploring the use of AR in other categories, such as fashion, home and electrical, in the future. “By using tech to bring our customers closer to the products, we can recreate the in-person shopping experience online and give them even greater confidence that they’re choosing the right products for them.”
In 2022, the retailer announced a partnership with True Fit, providing personalised size and fit guidance across its 300 fashion brands.
As an online-only retailer, Very is using technology to ensure its customers receive best-in-class service, reducing the likelihood of returns and encouraging repeat visits. With 1.8m daily website visits, the plan is clearly working.
5. Continued focus on value
Very launched its new own-brand value range, Everyday, in August 2022. Pitched to help combat the cost-of-living crisis, most items are under £30.
The collection – which initially launched 700 lines spanning fashion and homewares – was expanded in 2023 by more than 900 new men’s, women’s and childrenswear and home products. There are around 1,400 lines live on its website today.
The Very Group managing director Robbie Feather said: “The positive response we’ve had since launch shows that we’re getting the offer right and we’re pleased to be expanding the collection significantly across both fashion and home.”
Despite flat sales of £1.68bn in its interim results for the 39 weeks ended 1 April 2023 (2022/23), Prospect forecasts The Very Group’s sales to approach £2.5bn by 2026/27 as the retailer continues to progress a strategy with customers firmly at its heart.
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