Home shopping sales rose by 14 per cent to £523.8m at N
Brown in the year to 24th February 2007. There were sales
increases across all customer and product groups with the group
delivering better than expected growth in the second half of the
year against strong comparatives. Profit was also up by 26.5 per
cent to £76.4 million. Chief executive, Alan White,
commented on the results, “The vast majority of the sales
growth has come from our established database of customers
recruited in previous financial years. We have a database of over
five million customers who have placed an order in the last two
years and during 2006/7 the number of active customers rose by 3
per cent and the average spend per customer rose by 7 per cent.
The remainder of the sales growth was from newly recruited
customers who responded to product advertisements or
mini-catalogues in women’s magazines or the national press, or
are attracted by our television advertisements. In addition we
have recruited encouraging levels of new customers through
internet search engines. The sales from all newly recruited
customers rose by 9 per cent.” He continued, “From
our experience we know the more categories a customer purchases
from the higher their loyalty in the future and it is promising
that these campaigns have been successful. Currently only 11 per
cent of customers buy from all three of our clothing, lingerie
and footwear ranges and there is a strong growth opportunity in
the future to increase the level of cross-selling.”
The internet has contributed to a significant shift in the way N
Brown communicates with customers. Online sales now represent 22
per cent of total sales (£112m), rising from 16 per cent
last year. Online customers tend to spend more, with average
online order values 25 per cent higher than traditional channels.
Customers are then included in the group’s email marketing
campaigns which “generated incremental demand at a very low
promotional cost”. Alan White says that customer
recruitment via sponsored key words is now a core part of
recruitment campaigns and that there is “further work we
can do to optimise this activity”, adding, “The
internet model has changed dramatically from the days when we
merely replicated our catalogues online, to one where it is the
testing ground for new concepts.”
The outlook seems bright too, with sales for the 10 weeks to 5th
May 2007 up by 17.9 per cent, or 14 per cent on a like for like
basis. Alan White concluded, “We have a number of
initiatives to widen the appeal of our catalogues whilst
continuing to develop our core selling propositions. We recently
launched Simply Living which is a more contemporary home and
leisure offer for our younger customers. In March 2007 we
commissioned a television advertising and media campaign to
promote the launch of Simply Yours, targeting the younger, larger
but more affluent customer for our corsetry and lingerie ranges.
We will endeavour to increase our market share through a wide
assortment of recruitment techniques which should increase our
active customer database as well as driving higher sales per
customer”.
Share