Debenhams has announced plans to increase its investment in automated systems in its distribution centres to support developments in its omni-channel offering.
The department store chain is hoping to strengthen its omni-channel offering after reporting a fall of 24.5 percent in its pre-tax profit to £85.2 million for the half year to 1 March 2014. A 24.1 percent growth in website sales prevented the profit fall from being more serious, as shoppers moved from bricks and mortar stores to online.
“Convenience became a much more important driver of customer behaviour in the crucial pre-Christmas period than in previous year. This favoured retailers with better developed multi-channel models than Debenhams,” the retailer said.
By increasing automation, Debenhams hopes to reduce the per unit cost of fulfilling online orders, particularly around its Click & Collect offering. Click & Collect accounted for about 24 percent of the retailer’s online orders during the period, compared to seven percent of orders in the same period last year. Its distribution costs for the period was £54.4 million.
The retailer expects to increase demand on its distribution centres because of plans, over the next six months, to expand its delivery options to next day Click & Collect and to extend the cut-off deadline for next day home deliveries from 2pm to 10pm, to capture “peak” shopping hours.
“As a result we are accelerating our investment in automation in our distribution centres, starting with the packing process in time for peak trading,” Debenhams said in its results.
According to statistics from IMRG-Experian Hitwise, Debenhams said that it is the eleventh biggest UK online retailer by traffic volume and the sixth most visited mobile retail site. As part of its multi-channel overhaul, it plans to focus more on its mobile channel.
“Our mobile platform will also be strengthened as we continue to build our mobile advantage as this is the fastest growing channel in terms of visits and sales,” it said.