What part did multichannel play in lifting sales and profits at JD Sports?

JD Sports Fashion this week said a multichannel approach was a key part of its record performance in a year in which turnover grew by a third and pre-tax

profits by almost a quarter.

The sports, fashion and outdoor retailer reported revenues of £3.2bn in the year to February 3, 33% up on the same time last year. Pre-tax profits of £294.5m were 24% up on last time. Online sales across Europe grew by more than 30%.

Executive chairman Peter Cowgill said: “This is an excellent result, demonstrating our capacity for continuing growth in both existing and new markets and the strength of our offer in store and online.

“”After delivering a headline profit of £100 million for the first time in the year to January 2015, the headline profit has increased by more than £200 million over the subsequent three years, a rise in excess of 200%. This sustained growth could not have been achieved without a relentless and ongoing focus on a number of key principles which ensure we remain the undisputed consumer destination of choice for sport lifestyle footwear and apparel.
“The investments we have made over a number of years in developing our multichannel proposition and driving improved buying, merchandising and retail discipline have ultimately led to the creation of a world class sports fashion business which combines the best of physical and digital retail on an increasingly global scale.
“We are very encouraged by the progress that we are making internationally and we continue to look for further opportunities to bring our dynamic multichannel proposition to new markets around the world with the support of our key brands.

So how did a multichannel strategy help the retailer? Here are our highlights.

Customer experience
The retailer points to its “best in-class multichannel experience with breadth, newness and exclusivity” that is “consistent across all channels and in an expanding network of international markets”.

Operations and logistics
Its business is underpinned by a multichannel infrastructure, says JD Sports, which gives customers from different countries access to a universal stock pool. This, it says, enables them “to shop with us in the channel and at the time of their choice”.

Strategy and innovation
JD Sports says that a consistent approach across territories and across its range of local language websites makes it an “attractive proposition for premium third-party brands”, while “a high degree of exclusivity”.

Its outdoors business was boosted by its acquisition of Go Outdoors during the year.

The retailer says it uses innovative technology that reacts to consumer expectations to satisfy “a demanding digital-first consumer”.

The retailer expanded further in Europe (+56 stores) and Asia Pacific (+9 stores). It has also agreed to buy US multichannel retailer The Finish Line, which has 931 stores in that market. This, it says, is an opportunity to bring its “dynamic multichannel proposition” to a new market.

What the industry says
Heather Barson, director of retail and hospitality at Fujitsu UK and Ireland says: “It’s easy to label ‘multichannel’ and ‘omnichannel’ offerings as retail buzzwords, but the proof is in the pudding, or in this case, JD Sports’ record sales and profits. Where many retailers and brands still think of online, in-store and mobile as siloed parts of the business, shoppers do not. The journey for consumers can entail a number of channels, from initial product research and seeing an item up close, to having it delivered at a time and location convenient to them. For shoppers, it is all one service.   
“This seamless experience isn’t something retailers can brush off any longer. As the whole customer journey becomes one, retailers need to ensure they have the right digital strategy to bring their different channels together, but currently, only 50% have this in place. JD Sports has made a strong investment in its strategy, at both the front and back end of its systems, which has enabled it to offer an enjoyable, seamless and more cohesive experience for its customers. Customers clearly respond well to retailers who enable them to shop freely, via any channel they wish. It’s the retailers who listen to this customer need and have a unified strategy throughout the business that will reap the reward.”

Catherine Shuttleworth, CEO at Savvy says: “Strong results this morning from JD Sports as our desire for branded trainers and clothing sees no slow down. The retail offer is highly desirable and is managing to encourage shoppers to come into store as well as spend online. Strong relationships with suppliers delivered through exclusive products drives differentiation that shoppers want and are prepared to pay full price for. A strong performance and good news for the high street.”

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