Dunelm updates on digital and sustainable progress

Home furnishings retailer Dunelm has shared a further insight into its progress within two key areas of the business as sustainability and digital offers continue to evolve.

Detailed within its interim results for the 26 weeks to 31 December 2022, where total sales rose 5% to £835m from £795.6m and pre-tax profit fell 16.6% to £117.4m from £140.8m, Dunelm has implemented £17m of investment in digitalisation, capability and capacity to support “future growth opportunity”.

As part of this, in the first half, Dunelm delivered a number of improvements to its proposition including the diversification of its payment options, introducing Apple Pay and ‘Pay in 3’, using functionality from its new online payment platform.

Furthermore, Dunelm introduced more convenient delivery options, with a trial of parcel shop collections in London and the Midlands, while also trialling bookable consultations and live chat, to give more customers “access to the expert help available from store colleagues”.

“We are excited about the significant opportunities in our plan; over the next 12 months we will introduce long term credit, achieve higher ‘perfect order’ rates by shortening lead times and improving communications, and we will also use our data to inform our plans for new stores and refits,” said Nick Wilkinson, Chief Executive Officer (CEO) at Dunelm.

“We launched self-help tools for customers for order tracking, which provide both a better experience for our customers and reduce calls to our customer care centre. We have worked hard to reduce the number of separate home delivered parcels for single orders by stocking products in multiple locations across our distribution network. There are significant opportunities for further improvement here, which we expect to progress over the next year.

“We are well into a multi-year programme to improve our commercial operations by introducing new tools for master data management, forecasting and replenishment, and a new portal to help us collaborate even more effectively with our suppliers. Once complete, we will be able to bring products to market more quickly, improve availability for our customers and reduce manual work for our colleagues.

“As our customer data matures over time we have a significant opportunity to offer customers more personalised communications and experiences, further increasing the efficiency of our marketing spend. We will begin using our single customer view to test and learn over the coming year.”

As for sustainability, Dunelm revealed it is making “good progress” with its Conscious Choice range, which launched last year. Conscious Choice offers sustainably-focused own-brand lines, with each product being made from at least 50% more sustainable materials (by weight) compared to conventional alternatives. The retailer recently extended this range to include its polycotton bedding, which is now all made from recycled polycotton.

“We have also been innovating in product design, to offer customers a broader range while maintaining value. For example, changing the mix of raw materials to maintain a desired price point without sacrificing quality, offering self-build alternatives in furniture to offer customers more choice, and innovating in the design of packaging to reduce transport costs,” Nick added.

“In FY22 we rolled out our textiles take-back scheme nationwide, allowing customers to return unwanted items, whether or not they were purchased from Dunelm. We recently launched a new product range, in our Conscious Choice assortment, using up to 100% recycled fibres, with at least 40% of those materials coming from pre-loved textiles like those generated from our take-back scheme.

“The range reflects our commitment to creating a more circular future, by recycling returned materials and developing products from end-of-life items. The new range includes waffle cushion covers, waffle throws, muslin throws and printed cushions. The products feature at competitive price points, because we believe sustainability should be accessible to all, and is a further example of innovative product development in our heritage categories.”

Alison Brittain, new Chair at Dunelm, added: “Sustainability and community are at the heart of what we do, and are increasingly integrated with our day-to-day working practices. We are making good progress on our ‘Pathway to Zero’, for example in our Conscious Choice ranges, where we will soon have the first products in store using materials like those recycled through our own textiles take-back scheme. We were very pleased with our ‘Delivering Joy’ campaign, which saw more than 60,000 gifts – three times as many as in the previous year – donated by our customers and colleagues to support local causes over the festive period.”

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