How The Works is investing online and in-store to become “more than a retailer” for its customers – Strategy and Innovation
The Works invests in its customer experience across all channels. Image courtesy of The Works
The Works wants to be “more than just a retailer” for shoppers who, rather than “just buying a product”, are now looking to “buy a brand”. It means, says Gavin Peck, chief executive of The Works, in semi-annual figures today, showing customers “what they can ‘do’ – read, learn, create and play – and empower them to do so. To do “. Its strategy now is to grow its online and in-store channels around creating “deeper relationships with our customers and greater brand loyalty.”
To that end, it is improving the customer experience by expanding the range and improving its ability to execute online and, in-store, by enhancing a store base that Peck describes as “the cornerstone of our business and the primary way how we interact with our customers”.
The update comes as The Works, one of the top 100 retailers of Search RXUK Top500, reports revenue of £116.1m 26 weeks to October 31, 2021 . That’s 30.6% more than the £88.9m reported a year earlier, and 17.9% more than two years earlier. E-commerce (+80.7%) and in-store sales (+7.3%) were ahead of two years ago on a like-for-like basis (LFL) which removes the effect of store openings and closings , while LFL sales increased by 14.5% over the same period. The Works says the drop in in-store visitors has been offset by higher average transaction values.
In the end, it reported a pre-tax loss of £1m, down from £4.3m the previous year.
In the following 11 weeks, through January 16, 2022, LFL sales were 9% ahead of the same period two years ago, with in-store sales up 0.6% and in-store sales up 0.6%. 71.9% line. The company believes some Christmas trades were postponed in September and October, but says sales in the week before Christmas were less affected than expected by the Omicron variant of Covid-19.
The retailer says that, looking forward, strong business performance should now “more than offset the significant increase in container freight costs”, allowing it to forecast an annual profit of around £15m.
Gavin Peck, Managing Director of The works, said, “Our performance in the first half demonstrates that our enhanced customer proposition, clarified purpose and successful execution of our strategy are delivering tangible results. We delivered a record Christmas, demonstrating the growing appeal of our customers’ offerings and despite the uncertainty of Omicron’s impact and the continued supply chain challenges facing our industry.
“This better-than-expected trading provides confidence that we will deliver improved performance in FY22. We are now a much stronger business than two years ago and believe that delivering on our refocused strategy will a transformational effect on our business.
‘More than a merchant’: developing new multi-channel strategies
The Works is now focused on improving its online and in-store customer experience while developing a new kind of relationship with its customers.
In its semi-annual report, Peck says, “It’s becoming increasingly clear that consumers today don’t just want to buy a product, they want to buy a brand with a clear purpose. We have worked hard to clarify our purpose and be more than just a retailer. For The Works, that means inspiring our customers by showing them what they can ‘do’ – read, learn, create and play – and inspire them to do so.
The retailer now aims to be a “better version of ourselves, not just bigger” as it invests in all sales channels. Peck says, “We are focused on achieving our new purpose, improving our customer proposition, creating deeper relationships with our customers and increasing brand loyalty.”
The retailer expanded its order fulfillment capacity to generate higher sales during peak periods and offering what it says is a “better delivery promise than most of our competitors”, while expanding its range to sell products such as summer paddling pools. It has also hired a new digital marketing manager as it seeks to attract new customers to the site.
It is now looking to continue its online growth by attracting new customers, improving its online user experience in areas such as navigation and “buyability”, and adding multi-channel capabilities. such as allowing shoppers to order in-store products only online or improving its click and collect service. It aims to automate parts of its online execution.
At the store
Peck says The Works retail park is “the cornerstone of our business and the primary way we interact with our customers”. At the end of October 2021, it was operating in 526 stores, after three openings, five closings and four moves. It aims to open stores at a maximum rate of 10 per year, while seeking to reduce store rents. In-store enhancements will include simplified and more focused store layouts, while a new in-store EPOS system, currently planned for 2023, will allow it to add features such as in-store self-service.