06 Jan 2009
Department store Debenhams has reported positive financial results for the Christmas period due to a strong trading performance helped by its web site.
Debenhams Direct, the online business, registered growth in yearly visitor numbers and sales up 39.2 per cent and 37.4 per cent respectively.
Overall, despite posting a 3.3 per cent drop in like-for-like sales for the 12-week period since 21 October, the retailer said it enjoyed a rise in profit on last year's figures after achieving a "creditable" festive season.
"Our increase in profit is pleasing and reflects our stated intention to invest gross margin gains in strategic promotions as needed, but overall to run the business focusing on cash profit rather than just sales," said Debenhams chief executive Rob Templeman.
Debenhams has spent more than £30m revamping front- and back-office IT over the past two years, and improvements included a programme to use radio frequency identification technology to help measure in-store stock levels, as well as a data conductor to help gather sales intelligence from shops.
Some media reports have suggested that the department store delayed passing on the 2.5 per cent cut in VAT to customers, citing delays in updating store systems.
The success of Debenhams' online business over the Christmas period demonstrates why investing in back-of-house IT infrastructure - even in these tough trading conditions - is critical when it comes to boosting sales. Shopper numbers are declining, and with the future looking bleak, it's essential that retailers make the most of every sales opportunity. Debenhams knows only too well, after its site crashed in November 2008 following the launch of an online sale, we consumers are a savvy bunch and we don't think twice about shopping elsewhere if we experience poor online service.
Addressing this challenge may seem like a daunting task but solutions to monitor and cope with peaks of online traffic can be installed in a matter of minutes and needn't cost the Earth. What's more, readily available technology can be deployed on an 'as and when needed' basis so retailers are able to deliver high levels of service during busy periods such as when launching sales and online promotions.
Posted by: Graham Moore, e-retail specialist at Zeus Technology 06 Jan 2009
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