NRF: Shop Direct’s transformation from catalogue business to digital retailer

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Head of ecommerce Paul Hornby shared the seven-year story of Shop Direct’s transformation from a catalogue business to a digital retailer at the Oracle Retail Exchange in New York during last week’s NRF.

Since 2007, the home shopping group has transformed and modernised its business to give customers a digital shopping experience, rather than focusing on catalogue sales.

To support its three-year target for becoming “a world class digital retailer”, it has invested in Oracle ATG Commerce solution to replace its legacy systems and to underpin an increase in conversion rates and mobile optimisation.

Claiming to be the largest multi-brand online retailer, Shop Direct has six digital department stores in its offering, including Very.co.uk, Littlewoods.com and isme.com. The group recorded sales of more than £1.7bn in 2012 – more than 80% of which now take place online, across desktops, tablets and smartphones. Here are the key steps in its ecommerce journey:

2007

A year of “stellar growth” for the company, according to Hornby. At the time, Shop Direct was predominantly a paper-based catalogue business and online sales “weren’t a focus”, making up just 18% of sales. “Paper was king, we distributed 25m catalogues during 2007,” Hornby said.

2008

A corporate rebranding in May saw Littlewoods Shop Direct Group rebrand to Shop Direct Group to reflect the multi-branded nature of the business.The company revealed its mission to have 70% of its sales online by 2010. “We moved to just shy of 50% in that year,” according to Hornby, “and catalogue numbers fell rapidly to 17.3m.”

2009

Shop Direct’s “key USP was credit” and online became its “greatest channel”, making up 57% of all sales. Catalogue numbers fell to 14.2m. Shop Direct also changed from using its in-house web commerce platform to partnering with Oracle on its ATG Commerce solution.

2010

Online sales rose to 63% of total sales during the year and at Christmas, mobile accounted for 5.5% of sales, despite Shop Direct not having a mobile optimised site. “Customers were using our desktop on their mobile,” Horny explained, showing how integral mobile devices were becoming and encouraging Shop Direct to build a mobile site with ATG Commerce.

The number of catalogues distributed dropped to 12.2m and CollectPlus was also rolled out.

2011

A “very buoyant year” with online representing 71% of total sales, and mobile 11% of that. Catalogue numbers were “the lowest ever” at 12m. “2011 was the year we took our customer’s needs to heart and continued to enhance our mobile offering”, according to Hornby.

Shop Direct also re-built its online product pages resulting in a 2% increase in conversion rates. “Dynamic content merchandising products in any area of the site drove conversion by 0.8%; and sign in page saw a 14% increase,” Hornby added.

2012

The etailer realised “mobile was here to stay” in 2012, according to Hornby. “Our numbers had continued to grow, with online making 75% of sales. Mobile had grown to 18% of that figure and catalogues were down to 8.2m.”

Experimentation characterised the year, with Shop Direct “very keen to improve conversion rate on mobile” by running various tests on its website. “We continued to evolve that experience and trial blaze in terms of how customers interact with mobile app,” Hornby added.

In December the business sold 90,000 ipads in one month. It also identified three different ways customers were shopping – “they were ‘snacking’ for information on their mobile, whereas on desktops customers demonstrated a ‘lean forward’ behaviour where they were focused on it, and tablet was a ‘lean back’ relaxed consumption”. Hornby said: “We needed to work those up.”

2013

Shop Direct acknowledged that “mobile is the future”, with online making up 81% of sales. Of that 38% were mobile sales. Catalogues numbers had fallen to 4.2m and the company launched a third version of its mobile site, pushing conversion rates up even higher.

Shop Direct also launched a magazine featuring image recognition, a technology Hornby believes is “going to be huge, enabling customers to interact with the high street and paper, and bridge that gap”.

The group opened a Usability Lab in house to “bring customers in and see how they interact to really get under the skin of customer behaviour”.

At Christmas, online sales accounted for 84% of total sales. Mobile sales increased 64% and accounted for 43% of online sales, while traffic from mobile devices beat desktop for the first time at 52, up from 37% last year. The retailer also enjoyed 56 million visits to its websites, an increase of 32%. The group sold over 119,000 tablets and one onesie every 35 seconds.