A Digital Transformation like no other

There's currently a lot of noise and press speculation about the future of Wilko, one of the most famous and longest standing retailers on the UK high street. In my view, the business has relied for too long on its physical locations and single value proposition, choosing to limit its investment in the digital and e-commerce side of the company, as competitors caught up and then moved ahead.

Amidst the speculation about the chain's future, the new management team (who only joined in February), have kicked off a rapid digital transformation of the retailer. The leadership team, headed up by new CEO Mark Jackson are totally focused on transforming the business, whilst the clock continues to tick. If they pull this off, it will be one of the most stunning turnarounds in retail history and for years to come, will provide Universities with a brand-new case study on Rapid Digital Transformation and a blueprint for many existing retailers who struggle with finding a clear path through the digital maze.

More on the new team here - https://www.insightdiy.co.uk/news/wilko-announces-new-leadership-team-to-drive-strategic-priorities/12175.htm

Interview with Ben Exall

I wanted to understand just how far Wilko had come in the last five months, so last week I had the opportunity to discuss the transformation of the company with their Digital and Marketing Director Ben Exall.

But first a little background.

Today Wilko are a ￡1.2bn turnover business with strong presence on UK high streets through their 400 stores, online at wilko.com and through their great value Wilko own brand products, serving local communities with their everyday household and garden needs for over 90 years.??

Since 2022, they’ve moved forward with strategically accelerating their omnichannel experience, starting with the requirement to digitally enable wilko, a traditionally bricks and mortar business, improving the overall digital customer experience and opening up new marketplaces for their wilko products.

Wilko has some distinct characteristics within its sector; with over 50% of sales in their own brand products, their local, high-street shopping locations and ever-expanding digital capabilities.

Talk me through the background to the digital transformation of the business?

Wilko initially recognised the early changes in consumer buying behaviour with the launch of wilkinsonplus.com as early as 2005 (later rebranded to wilko.com in 2013). However, previous lack of leadership alignment and oversight led to an underinvestment in its digital capabilities. The further shift driven by the pandemic was the catalyst for a significant change in the digital attitudes at wilko, where we’ve now playing fast catch-up, with investment beginning in earnest in 2022.

As part of the turnaround plan launched in January 2023, we’ve continued to move forward with strategically transitioning to omnichannel, making significant improvements to the digital experience and opening up new marketplaces for our great value wilko products.

Describe where the Wilko Digital business has evolved from?

Historically e-commerce sales averaged only around 2% of total sales participation, however our digital acceleration plan in implementation, will take this closer to 18%, 34%, if you exclude the FMCG lines.

Our omnichannel?experience was previously fragmented and fell short of meeting our customers' expectations, with key propositional gaps across our core competencies, including fulfilment, payments, and the online experience.

• Since the 2022 our focus has been on digital enabling the wilko business,?
• Current digital sales are +138% (year on year?)
• Conversion is up 51% & orders up by 75%.

What were the main barriers to shopping with Wilko.com??

Convenience was by far the main?barrier to shopping with wilko.com

We had, for example a single paid delivery method with no free options, a choice of card or PayPal for payments and a mobile experience that originated from a desktop-first website — unfit for the demands of mobile-first and consumers who are more tech-savvy than ever

Which areas have required the greatest investment?

There has been significant headroom and opportunity to scale the digital performance, both in terms of its share of total wilko business and share of market. To seize this opportunity and create the foundation for accelerated growth, we began significant investment to realise a full digital transformation of the company.

We’ve established key digital disciplines investing in our internal capability across ecommerce, performance marketing, digital development, and operations.

We’ve made changes across the business operating model to create an omnichannel organisational structure with an aligned, experienced, and refreshed leadership team with clearer board accountabilities for omnichannel transformation.

We’ve made technology enhancements to the platform and invested in new leading-edge technologies to broaden fulfilment options, digital experience and payments.

We’ve invested in and transformed our development programme, moving from a single development team to multiple agile development squads, all aligned to pillars of our accelerated digital transformation strategy. These squads unlock faster delivery cycles through a remit of continuous improvement, focused on delivering customer-facing change at pace.

We’ve restructured the full cost base for wilko.com, including significant changes in fulfilment and aftercare operations.

This growth has been driven by several key propositional enhancements brought to bear through our agile development, delivery pipeline.

From a consumer perspective, what are the key changes they will be aware of?

1. Click'n'Collect

Most notably, we’ve unlocked the ability for customers to use our 400-strong store network to buy online, collect in-store for free, and all in under 2 hours. This service is helping our customers get their everyday household and garden jobs done and Click and Collect enables us to help those customers with an immediate or distress purchase need.

Simon Reeve, Head of Solution Delivery and Software Engineering at Wilko, said: “I’m hugely proud of the cross functional team here at Wilko that has recently brought Click'n'Collect to all of our 400+ stores, resulting in a great new way to shop and some terrific feedback from our customers and team members.”

Beyond Click and Collect we’ve transformed our wider fulfilment offering and extended our partnership with GXO Direct our logistics provider, we now provide more home delivery options to meet a variety of customer convenience needs across multiple price points — next day, nominated day and collection points/parcel shops.

More on the partnership here - https://www.retailgazette.co.uk/blog/2023/06/wilko-gxo-omnichannel/

2. Online Range Expansion with Virtualstock

We’ve recently partnered with VirtualStock, Europe's largest drop-shipping platform to expand our ranges in our ‘famous for’ categories, already adding over 10,000 products to wilko.com in less than two months. This catalogue growth ensures wilko is a true one-stop-shop for all our customers household and garden needs and ensures customers they can access everything they need to complete their projects when shopping with wilko.

Our partnership with Virtualstock will allow us to use accurate, real-time data compiled by Virtualstock’s management solution to increase product selection and availability for shoppers, streamline manual stock and financial processes, and make it easier to handle customer deliveries and returns.?

More on Virtualstock here - https://www.virtualstock.com/

You mentioned ranges that Wilko should be 'famous for', what are those?

We started as a Household and Garden retailer in 1930 and this remains our stronghold – we’re famous for being a ‘one-stop-shop’ for all those products that simply ‘get the everyday jobs done’ around the home.

Wilko has a clear role in a growing market – experts in everyday home life, offering 7 total category solutions for everyday jobs across?garden, decorating, DIY, cleaning, storage, kitchen and pet care…with supporting acts in toiletries, stationery and home.

We have over 10,000 wilko branded products sourced in partnership with our global product sourcing division, wilko worldwide. These products offer affordable quality and sit alongside the best branded products.

We work hard to bring customers simple, reliable, products along with friendly, helpful advice and of course – good honest value.?

Growing our ranges in our ‘famous for’ product ranges?to ensure consumers have everything they need to complete their everyday jobs with wilko is central to growth plans.

3. Payment Technology

This theme of convenience is a common thread through our strategy and makes its way into our payment offering where we’ve partnered with leading 'Buy Now Pay Later' providers Klarna and ClearPay, to offer greater choice and payment flexibility to meet customer needs in a challenging economic environment.

4. The Wilko.com Shopping Experience

Finally, customers will notice the ever-changing experience of shopping on wilko.com, particularly on mobile devices, where we’ve deployed multiple enhancements, all focused on helping our customers find, shop and buy effortlessly. The most compelling being an all-new and optimised checkout experience that reduces checkout time by an average of 40% for customers.?

There are more subtle changes too, like enhancements to the algorithms that power onsite search and product recommendations, or user experience improvements to image galleries on product pages and more streamlined navigation facilitating onward journeys and helping customers get to products faster.

Seemingly small changes like this work in concert to create an experience that’s greater than the sum of its parts — and thanks to our maturing experimentation and A/B testing capability we’re able to tie these experience improvements back to commercial benefit and revenue growth.

What results have you seen as a result of the transformation??

Building on the foundations of the last 18 months, wilko.com is in positive sales growth (up 50% April - June YoY). We’re now in a position to accelerate our digital transformation as part of our turnaround plans.?

Since the beginning of our investment, digital sales are +138%, conversion is up by 51% and orders by 75% and in the first 6 months of 2023 calendar year, online market share has increased by 100%*?

*Neilson value and volume market share data. Feb 2022-Jan 2023 vs Feb 2023-June 2023?

With so much progress already made in a short period, what are the current priorities for the Digital team?

Delivering on convenience?- Ultimate customer convenience and choice across fulfilment, payments and aftercare.?

Frictionless mobile experience?- Help customers find, decide and buy effortlessly, on their mobile device.?

Lasting customer relationships?- Build brand loyalty through a tailored membership programme and online account.?

If you could magically fix any digital aspect of the business in the next 24hrs, what would it be??

We’ve a full pipeline roadmap of developments for improving the wilko experience. If we could flick a switch all of that value will be delivered today.

One of the most interesting developments of the last 12 months is the partnership you've formed with eBay, can you tell me more about this?

Current marketplace partnerships exist with Amazon and, most recently eBay along with several others. We have partnered with marketplaces to provide consumers with greater access to our wilko brand products in a way that works for them.

I understand you've recently launched on TikTok, what's your social strategy?

TikTok is the latest social channel we’ve launched into, and we’ve seen a fantastic response from our community there. TikTok ties into our wider social strategy, which is to get UK shoppers who are just discovering or already love wilko to discover our everyday product range by engaging with relevant and useful content.

With TikTok, we’re tapping into the 1 billion monthly active users on the app and have a dedicated strategy for the channel working with content creators that speak directly to our wilko consumers, alongside commerce opportunities.?

A recent Wilko campaign on TikTok 'from ugly to lovely' - https://www.tiktok.com/@love_wilko/video/7253385582544506138

In Summary - Steve Collinge

The Wilko business is in the middle of a digital transformation that will completely change the shopping experience for their existing and new customers. The extent and pace of the transformation is well beyond anything that I have experienced before in the Home and Garden market and will provide the foundation to deliver on their future growth ambitions. Choosing to partner with businesses like Virtualstock, eBay, GXO Direct and TikTok will deliver cutting-edge technology and access to whole new customer groups that will re-define the future of the one of the best-loved retailers on the UK high street.

Steve Collinge is an international speaker, retail and technology influencer, retail commentator and is Managing Director of Insight Retail Group Ltd and executive editor of Insight DIY. You can follow Steve on?LinkedIn here?on?and contact him via?DM at any time.?