Following The Works posting flat sales in what it described as a “challenging year”, Retail Week speaks to chief executive Gavin Peck on his optimism for the year ahead, including how the group will boost sales for Christmas and improve its ranges
The Works has been through quite a transformation of late. Once operating a jumbled assortment of cheap items, it is now much clearer on its offering of books, games, arts and crafts and toys for the whole family.
The retailer delisted from the main market in May and switched to AIM to reduce costs, while also refitting and relocating stores to “improve the quality” of its store estate.
Gavin Peck sits down with Retail Week to delve more into future plans, for its stores, website and customer base.
What steps are you taking to improve sales and profitability in the next year?
“We are trying to be more focused on our core customer, which is typically families with young kids. There’s research about screens becoming addictive, people spending too much time on screens and wanting to find other activities, and we think there’s a cracking opportunity for us with reading, learning, creativity and play.
“We’re about to go out with a new strapline for Christmas called “Time Well Spent”, which could be buying a book for yourself, crafting with kids on a rainy day, playing board games as a family on Saturday night, and we want to provide those activities. Having that strapline and clarity of target customers and brand means we can be much more focused in our marketing activities.
“Then we have all the operational improvements we can make. Whether that’s how we order our stock or allocate our space in stores. So, at the minute, we do a one size fits all where some stores will get exactly the same range, although it’s a very different shopper and shopping mission. We want to be able to give slightly more tailored ranges to different stores, but we need to build the capabilities to do that.
“Across brand, proposition, product, and the operational side, we think this will grow our sales in the next few years, and a big opportunity for us is becoming that front of mind all year round – not just for back to school, Easter and Christmas.”
You recently got rid of your loyalty scheme, how has this impacted business?
“We haven’t seen an adverse reaction as customers have been really understanding. The reality is we’d rather keep the prices low all year round. One of the benefits we had is getting great data on customers to offer them more tailored offers and communications. So, we are looking in the background to see if we can do this through the app or if customers can sign up, say what they’re interested in, and capture a bit of data to do something a bit more tailored. But that’s still under development.”
Are there any locations in the UK that you’re thinking about targeting for openings?
“There’s probably 100 locations where we could open a new store. We don’t have a great presence in city centres like Leeds, and we trade really well in outlets. There’s local towns through to big city centres and retail parks where we still don’t have a presence, but we’ve seen a lot of success relocating smaller stores, older stores or stores that are slightly off pitch in places like Wolverhampton and Grimsby.”
With online making 10% of sales, are you planning on improving the online experience?
“We’ve focused the last 12 months really on getting the online profitable, because if we can’t make it profitable we probably shouldn’t have a website. It broke even last year and we believe it can be profitable. This year, we’re on track for that and we’re thinking about the stores and website working together.
“We’ve started doing a lot more analytics on where customers go on the site, how we optimise those journeys, and we have a new head of online earlier this year who will be leading the next step of that. We’re hopeful and expect to be able to grow stores and a website together.”
How are you planning to gain consumer spend over Christmas?
“Our ranges have got better year on year, we have the “Time Well Spent” strapline that we can market and try to connect with current customers and new customers who don’t know who we are and what we stand for. We’re much better placed than we were this time last year, as our distribution centre ended up full and we were having to delay intake, take it off-site, push more out to stores, and turn promotions on to sell more volume and keep the stock moving.
“This year, we’ve set up a second facility with our online distribution partner that’s fulfilling some store orders, which means as of today, 40% of our own distribution centre is empty, so we’ve got the space for the stock that’s on its way.”
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