This week's retail news 'you may have missed'.....
At mdj2, we’re passionate about retail and always looking to share our news, views and insights. With so much information out there, we wanted to share just a small selection of retail news headlines from last week that we found interesting…??
Wren Kitchens launches fitted bedrooms
Kitchen retailer Wren Kitchens has extended its product range with the launch of a fitted bedroom collection.
The made-to-order furniture will initially consist of single and double-fitted wardrobes, chests and bedside units, as part of a selection of over 80 unit types and over 20,000 unit combinations.
Customers will also have access to design and installation services, as well as finance options.
To order their new furniture, customers can take their own measurements to any Wren showroom and have a surveyor visit their property to ensure their new bedroom can be delivered and installed smoothly. Alternatively, they can request either a home design or a home measurement appointment.
Joanne Dodsworth, head of bedrooms at Wren Kitchens, said: “We’re thrilled to announce the new launch of our fitted bedroom range. The fitted bedroom market has seen continual growth in recent years and has inspired us to offer more quality Wren products throughout our customers’ homes.
“Wren has always aimed to help its customers achieve the home design of their dreams, and our new bedroom ranges have been styled with the same careful attention as our kitchens.”
Walmart outlines three priorities for the future
Walmart's recent analyst update highlighted three clear priorities; to grow sales, improve margin and strengthen return on investment. Here we explore how it plans to achieve this.
65% of stores to be serviced by automation by 2026
One of the key headlines from the event was Walmart’s aim to have roughly 65% of its stores serviced by automation by the end of fiscal ‘26. It estimates that approx. 55% of its fulfilment centre volume will move through automated facilities. It expects unit cost averages to improve by around 20%.?Increasing productivity is helping Walmart to improve its operating margin. The investments it has made in recent years in in-store technology and supply chain automation are already driving returns far exceeding its expectations.
“The investments in automation are already far exceeding our productivity targets, in some cases almost 30% better, as we are able to flow inventory at lower costs and with less manual labour”.?John David Rainey, Walmart CFO.
The retailer will continue investing in scaling supply chain automation, making improvements to data, software and robotics. This will enable it to drive even stronger returns.
“We’re now in a phase that is less about scaling store pickup and delivery, ecommerce assortment and ecommerce FC square footage, and more about execution and operating margin improvement”.?Doug McMillon, Walmart’s President and CEO.
Improving the experience for customers
Implementing automation more widely is great for the customer experience as it improves order accuracy, product availability and speed of delivery. It can also help with unit economic costs, helping Walmart to maintain its everyday low prices. Automation helps Walmart’s store associates by reducing time spent on manual labour, which, in turn, can be reinvested in better serving customers.
Ambitions to drive company-wide profitability in ecommerce
Walmart sees the future of retail as omnichannel and it aims to achieve enterprise level ecommerce profitability in the coming years.
“By incorporating omni-strategies and our connected ecosystem of value drivers, we see the potential to achieve enterprise level ecommerce profitability in the next few years.”?Rainey.
If we look at Walmart’s ecommerce performance in China, the retailer has reached almost 50% online sales penetration and this is mostly fulfilled from its stores and clubs. Over time, this has become a profitable business, and this gives Walmart clear insight into how the channel can be profitable in other markets, particularly the US.?
Driving incremental growth through non-core services
Walmart’s business mix will also help to improve its operating margin. It is now generating revenue from fulfilment services, marketplace fees, advertising income, data monetization and moree. These non-core services generate ‘appreciably higher’ margins, which is key to driving incremental profit growth. It expects to further accelerate these revenue streams in the coming years.
In terms of driving retention, Walmart+ has quickly become the retailers’ most powerful tool, Walmart sees higher engagement and frequency from Plus members and the average member spends twice as much as non-members. The retailer can leverage this subscription service to unlock greater personalisation, also helping to lock in loyalty.
Further expansion of its Marketplace
Walmart’s Marketplace stocks over 400m items and the retailer grew its total sellers by almost 50% year-on-year in 2022. It will continue to increase the number of 3P sellers (particularly in GM), further growing and differentiating its assortment, whilst strengthening its business model.?
The ongoing growth of its marketplace will be focused on three areas:
1.) Stocking more high-quality items and sellers
2.) Monetizing its fulfilment services, and
3.) Activating sellers to use its advertising platforms.
Retaining higher income shoppers
In its annual reporting, Walmart announced that much of its recent customer growth had come from high income shoppers who had migrated from competitors in pursuit of value.?Walmart is more confident than it has been in the past that it can hang on to these shoppers based on the greater flexibility and convenience the business now offers customers, as well as its omnichannel solutions.
Looking ahead…
At a company level, Walmart is targeting a compound annual growth rate of around 4% over the next three to five years, and it expects to grow operating income at a faster rate. Its five-year plan would see it add more than $130 bn of sales to the $600 bn reached in FY 2023.?Walmart’s Capex will equate to around 2.5-3%, flat or slightly higher than last year. Over the next five years, almost 90% of this will be invested in high-return areas, including ecommerce, supply chain and store investments.
Selco launch six month quote promise for Tradespeople
Tradespeople have been given the chance to secure pricing certainty during 2023 after we introduced a special quote guarantee scheme for customers.
We have launched a ‘Quote Lock’ initiative to run throughout April, fixing the prices on quotes for six months.
The scheme is open to any official quote issued to a Trade Card holder, either in one of our 75 branches or online, at any point during this month.
Howard Luft, Chief Executive of Selco, said: “Throughout all areas of life, the cost of living crisis has had a real impact and tradespeople have been affected too.
“We have seen rising prices across the board and tradespeople have had jobs cancelled at short notice through no fault of their own.
“We have done everything we can to keep the impact of rising prices to a minimum for our customers and now want to provide price assurance and certainty with the Quote Lock scheme, adding another layer to our usual pledge of competitive trade pricing.
“If a customer has a job either scheduled or potentially coming down the line, securing a quote throughout April will mean they know the prices they will be paying for the materials until the last quarter of the year.
“This will be a welcome boost for tradespeople during what has been a difficult period for everyone in society.”
Normally held open for a month, each quote generated in April will be valid for a total of 183 days. It can only be purchased once and will be valid for the quantity displayed on the quote.
UK high street faces ￡90bn bill from net zero rules
The UK high street could be hit by a ￡90bn bill for building upgrades due to the government’s new net zero rules.
The new standards will make 91% of all retail space, including the high street and shopping centres, unlettable by 2030 unless urgent and costly action is taken, according to property specialists?Savills.
The government will?ban commercial properties from being rented out?unless they carry a minimum energy performance rating of C by 2027 and a B rating three years later.
Savills forecasts it will cost between ￡55bn and ￡90bn to upgrade the retail space in the UK, with ￡10bn needed for London alone.
Commercial research director Tom Whittington told?The Telegraph: “It’s a disaster waiting to happen. There’s?not enough money or enough time.”
“The Government does not have a real handle of the significance of forcing through these regulations.
“What you can’t do is have a deadline in 2030 that is unviable and leaves you unable to lease around 80% of shops nationally.”
Ikea debuts As-Is online programme for used items
Retail giant?Ikea has launched a new As-Is online service for resale goods available to members of its free Family loyalty programme.
The retailer is helping its customers lower their environmental impact by giving discontinued and “gently used” items a second home.
Ikea said: “Hundreds of used furniture that made their way back to the store through Ikea’s Sellback program, products that are to be discontinued soon, and those with minor aesthetic damages, all end up here in this market.”
Family members will need to log into the portal and select the desired items. The goods will then be reserved for 48 hours for customers to pick-up the items at the designated store.
“As-is online joins our other services like Buy Back & Resell and the spare parts program that help our customers live a more sustainable life at home with a variety of ways to prolong the life of their furniture,” Ikea US chief executive and chief sustainability officer Javier Qui?ones said.
The programme is part of the retailer’s?environmental sustainability efforts?where it aims to reduce its emissions by 15% by 2030 and resort exclusively to recycled or renewable materials by 2030.
Ikea has seen?its online sales double?against 2019’s pre-pandemic figures, with overall sales increasing by 13% to ￡2.2bn.
ManoManoPro UK sees product catalogue grow by half a million as it celebrates one year anniversary
B2B Platform has seen a 73% rise in sign-ups in Q1 2023 versus the previous quarter, as the platform continues to grow in popularity within the trade industry.
In April 2022 ManoMano UK launched a new platform, ManoManoPro, designed by, and for, tradespeople and related businesses* as a ‘one-of-a-kind’ dedicated B2B service aimed to make their lives easier. One year on and the platform now offers over 1.5 million products from over 500 sellers, establishing it as one of the go-to destinations for trade professionals in the UK.
The platform, which is also available as a mobile app, offers trade professionals a unique experience combining the power of the ManoMano UK marketplace with specially tailored products and services, revolutionising the purchase process and saving trade professionals time to focus on the task at hand.
Since launch the platform has continued to grow in popularity within the trade industry. In March the total number of signups increased by 11% compared to February, whilst total sign ups in Q1 2023 increased by 73% versus the previous quarter.
The app has also performed strongly over the last year, with over 500,000 downloads from Apple and Android users so far, and an average rating of 4.6/5.
Trade professionals across the UK have been taking advantage of the time-saving benefits of the service since launch, with London, Manchester and the West Midlands proving the most popular sign-up locations so far. Trade generalists form the majority of sign ups (22%), whilst carpenters (9%) and maintenance workers (8%) have also taken a shine to the new service.
Interestingly, one year on and ManoManoPro’s strong sales performance has revealed a haul of interesting trends within the trade industry, leading to the Pro team calling out 2023 as the year of the bathroom redesign.
Bathroom products have been the second-most common bought items on the site during the last 12 months, with showers, shower accessories and water closets (WCs) forming three of the most popular sub-categories. Plumbing & Heating was another top performing sub-category, with radiator sales leading the way.
In recent years the bathroom has evolved from a purely functional area to one of the most important rooms of the house, with many now using the space for rest, relaxation, and luxury. This trend looks set to continue in 2023, with trade professionals preparing for a year of modern bathroom renovations. On ManoManoPro, three out of four of the most-bought individual items on the site were bathroom-focused:
Providing a simple way to buy tools and materials, seek advice and streamline admin, ManoManoPro launched with a pledge to give professionals back an hour of their day, every day. The major expansion of its product catalogue and seller partnerships is a testament to the rapid growth and success of the service over the last year, which provides a unique experience to trade professionals offering: Simplified purchasing process that can be performed quickly on a single platform reserved exclusively for professionals who can sign up by entering their company number or company name.
The positive performance of ManoManoPro over the last year in the UK encouraged ManoMano to pursue its international expansion?with the service launching in Germany seven months later in November 2022.
ManoMano aims to continue the strong launch of ManoManoPro in the UK by targeting 19% of all sales to be done through the app.
Marie Mahiou, head of Spart UK at ManoMano, says:?“It has been great to see such a positive response to the new platform within the UK trade industry one year on since launch. With 2023 looking to be an extremely busy year for trade, and rising costs continuing to challenge the nation, we want to ensure our service helps make the lives of trade professionals easier by becoming their back-pocket go-to for all tools and materials.”
Sainsbury’s Makes Change To Nectar Scheme To Challenge Tesco’s Clubcard Prices Promotion
Sainsbury’s is introducing ‘Nectar Prices’, a new loyalty initiative similar to that used by Tesco.
In an attempt to replicate the success of the Clubcard Prices discounts introduced by Tesco in 2019, Sainsbury’s will now give the 18 million members of its Nectar scheme exclusive instant savings on a range of products, including leading brands, when shopping in its supermarkets or online.
The retailer will initially offer Nectar Prices discounts on over 300 items, spanning household products, pet food and confectionary, with expansion to more categories planned. Examples include Ariel All-in-1 pods washing liquid capsules being reduced from ￡10.50 to ￡5, 24x330ml Coke Zero cut from ￡10 to ￡5, and Nescafé Gold Blend (200g) down from ￡8.10 to ￡4.
Unlike its previous system, where shoppers had to manually activate incentives within the Nectar app, the price cuts are applied automatically when the customer scans their Nectar membership card at the checkout.
Sainsbury’s will also continue to offer extra personalised discounts for customers who use its SmartShop app, with lower prices on the products they buy regularly.
Simon Roberts, Chief Executive at Sainsbury’s, said: “We are delighted to launch Nectar Prices, which will help millions of our customers save more on every trip to Sainsbury’s. There is much more to look forward to, we will keep refreshing Nectar Prices and increasing the variety of products on offer.
“It gets better, Nectar customers who shop in store with SmartShop will receive extra personalised value with Your Nectar Prices, bringing them the best prices on their favourite products. Our customers really are at the heart of every decision we make and we hope they find that Nectar Prices is an exciting way to bring them consistently great value all year round.”
In December last year, the retailer announced it was accelerating its value plan by investing a further ￡50m in keeping prices down – a move which meant by March this year, it had invested over ￡550m.
Sainsbury’s stated that its Aldi Price Match scheme will continue focusing on frequently bought fresh products, whilst Nectar Prices will cover a broader range of products.
Retailer loyalty cards have become a key focus in the battle for cash-strapped consumers amid ever-increasing competition from discounters, including Aldi and Lidl.