Debenhams has reaped the rewards of investing in its online and multichannel business as it reported strong sales over its Christmas trading period today.
The department store chain said last April that it was increasing investment in automated systems in its distribution centres to enable it to offer short-as-possible delivery times for online orders, as it found that shoppers were moving away from stores to shopping via the Debenhams website. It was able to launch next day delivery to homes with a 10pm cut-off for online orders, next day click and collect, nominated day, evening and weekend deliveries in time for the Christmas peak.
Consequently, in the 19 weeks to 10 January 2015, Debenhams said its online sales grew to 19.4 percent of its UK business. Sales from mobile channels also grew “significantly”, now representing 44 percent of the company’s total online sales.
Michael Sharp, chief executive of Debenhams, said: “We now have a competitive online proposition with next day delivery to home and next day click and collect, which customers took full advantage of and which performed well over Christmas.”
Debenhams said that demand for click and collect peaked at 38 percent of online orders during the Christmas period, and that its distribution centres performed well throughout, especially in delivering on the next day delivery promises. The same could not be said of Marks and Spencer, which last week revealed that problems at its ecommerce distribution centre affected the bottom line as customers were told they had to wait up to 10 days for standard online deliveries.
Christmas and Black Friday successes
In the four weeks to 10 January, Debenhams’ “key Christmas period”, online sales were up 28.9 percent, contributing to overall sales growth of 4.9 percent. Like rival department store chain House of Fraser last week, it also reported “record” group sales in the seven days up to Christmas.
Black Friday, the US-inspired shopping phenomenon that John Lewis has put into question because of the possible detrimental effect on Christmas sales, also delivered the goods for Debenhams. It saw online orders up 125 percent on the late November day.
In its outlook for the future, Debenhams said that its investments in supply chain and systems to deliver a “sustainable international, multichannel business remain within budget and on track”.
Other results today
The UK’s fourth biggest supermarket chain Morrisons announced the imminent departure of its CEO Dalton Philips today as it reported a poor performance over the Christmas period.
The supermarket reported a 1.3 percent fall for total sales in the six weeks to 4 January, while online grew one percent during the period. It said that it delivered its one millionth online order on the first anniversary of the launch of the online service last weekend.
Philips will be leaving the company after five years in March, during which time he has led the supermarket’s belated foray into online groceries using a platform from pure play online groceries retailer Ocado. He does not currently have a job to go to, and Morrison’s has now started the search for a replacement CEO.
Andrew Higginson, deputy chairman and chairman elect of Morrisons, said: “In the next chapter of Morrisons development, we need to return the business to growth. The board believes this is best done under new leadership.
“[Philips] deserves particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the company’s operating systems.”
Image credit: Debenhams