Following Shop Direct’s rebrand to The Very Group in January, Mike Wheeler, home category director of the UK’s largest integrated pureplay digital retailer and financial services provider, talks to Furniture News about sourcing and merchandising furniture for an increasingly digital audience.
The Very Group is the UK’s largest integrated pureplay digital retailer and financial services provider, with annual sales of £2b. Its largest (and fastest-growing) retail brand is Very.co.uk, supported by the Littlewoods.com and LittlewoodsIreland.ie brands – together, the brands’ websites receive an average of 1.5 million visits each day, with 79% of the online sales completed on mobile devices.
The group offers more than 1900 brands, including big-name labels and exclusive own-brands, and delivers 49 million products every year, to a customer base of four million.
The group aims “to make good things easily accessible to more people, and our aim is to be the number-one destination for shoppers who value flexible ways to pay. By offering customers the brands they love and options to spread the cost, we help them say ‘yes’ when it really matters”.
Mike joined Littlewoods Shop Direct Home Shopping as an ecommerce marketing executive in 2004, and rose through the ranks to be appointed category director at Shop Direct in 2018.
How does a background in digital marketing inform your approach to buying and strategy? Are there benefits to having a foot in both camps?
I’ve been at The Very Group for 15 years, and spent the first decade in digital marketing before moving into trading and my current role as home category director.
Digital marketing requires a strategic mindset and a data-driven approach. The same applies to buying and merchandising activity, creating the best product assortment and optimising the overall performance of a category.
Marketing experience means I’m accustomed to using internal and external data insight sources to interpret current market-drivers and trends. The methodology applied when optimising a search campaign can also be applied to optimising product assortment, by reducing investment in underperforming ranges and reinvesting into more successful lines.
Botanist trend, Very home range SS20
Through supporting Very.co.uk’s multi-category offer with digital marketing activity over many years, I developed a comprehensive understanding of our product assortment beyond home and furniture and the inner workings of the business.
How does The Very Group source home and furniture products?
Our approach to sourcing is divided into own-brand and branded products. Own-brand is a core part of our home offer, and we have a dedicated global sourcing team that collaborates closely with our product designers and category managers. We frequently develop new ranges based on emerging market trends to offer our customers the newness they love.
We also sell more than 150 major home brands, and will continue expanding our portfolio. This encompasses specialist home brands like Silentnight, fashion brands that have expanded into home such as Karen Millen and Calvin Klein, and partnerships with retailers like Swoon and Sofa.com that have built great brand authority in their respective categories.
We constantly review our supply base with the aim of onboarding brand partners that can offer our customers something new – from an entire incremental product category like graphic wall art to a unique handwriting not currently available on Very.co.uk but evident within the market.
We’re committed to improving product quality and the overall profitability of our supply base by regularly reviewing how each brand partner is driving growth. This helps us maximise future value.
The Very Group recently expanded its brand portfolio within the home category. What do you hope to achieve by doing this, and what balance of branded and non-branded goods would you like to achieve?
We’re clear about the purpose of our own-brand products, which continue to play a critical role across our core ranges. Own-brand is hugely important for large, predictable, volume-based product like essential bedding, which is less brand-orientated. It also contributes a great deal to our design-led, in-house trends.
We also know that customers love the combination of big brands and flexible ways to pay that we offer, as this opens up a premium alternative for customers who may otherwise struggle to access all the home brands they want. We launched Swoon, Tommy Hilfiger and Content by Terence Conran alongside several others in 2019 and will add more brands this year.
Our proportional mix of brands and own-brand varies by sub-category. For example, our DIY and nursery offers are 100% branded, while upholstery and bedroom furniture are more reliant on own-brand development. We believe that brands enhance our overall home assortment, by offering something unique that also complements our strong own-brand offer.
What are the challenges involved in running such a large team?
There are more than 50 people in the team so spending time together is challenging, but we make sure there are several weekly touchpoints including full team huddles and smaller group meetings. The Very Group’s category management structure also drives collaboration between product teams and others such as logistics and commercial finance. We try to do that in person regularly, too.
The biggest challenge is guiding the team through change whilst maintaining performance and managing our existing workload and supply base. It can also be difficult to switch off, as the job is never done!
How is the way The Very Group’s customers shop changing? Do you see the credit model taking any new directions?
Our customer base is growing and we now have 4.05 million active customers, with more shopping for home and furniture on Very.co.uk than ever before. As we are 100% digital, we have to think creatively about overcoming barriers to buying online – like the fact that most people still want to see and feel the fabric of a new sofa before purchasing. Offering fabric swatches to help customers decide is one example of how we overcome these barriers.
Hike trend, Very home range SS20
Attitudes towards delivery are also changing. Previously, we saw speed of delivery as our number-one priority, but we’ve found customers love being able to choose a precise delivery time and date that suits them, even if that’s slightly further away. That said, speed is still important, and several of our suppliers of made-to-order products now manufacture them on a JIT basis to minimise the time between production and delivery.
Making good things easily accessible to more people has always been our core purpose, and combining the brands our customers love with market-leading flexible ways to pay will continue to be at the heart of that.
Who do you see as your biggest rivals in this marketplace? And which businesses inspire the way you go about things?
Our competitor set is broad because we offer so many sub-categories within home and furniture. It has also expanded as more retailers have become alive to the value customers place on credit.
We take inspiration from brands that innovate in any form, including from a product design, technology and sustainability POV. IKEA is a great example of a brand setting the pace for the future of retail – for example, with its new planning studio formats, and sustainable options such as the ability for customers to lease furniture rather than buy it.
Emerging players that positively disrupt our market inspire us, too.
Please share some of the more revealing insights you’ve learned from The Very Group’s customer data in recent years, and explain how you’ve responded
A recent example is analysis of customer data that revealed a high number of failed searches for paint. As a result, we launched Craig & Rose, Rust-Oleum and decorating accessories brand Harris during our peak period in 2019. We think paint and decorating accessories will see robust growth over the next few years, along with an increase in online penetration.
Our category and design teams also collaborate and use sales data to identify bestselling products that can be updated to feature in a future trend, building on existing successes. For example, if the data identifies a particularly successful upholstery line, we can maintain the shape but refresh the fabric or colour in line with the new trend.
Are there any industry developments in the pipeline which are likely to change the way you do business (both personally and at a group level)?
More than ever, our customers are looking online for digital inspiration and shoppable social content. Harnessing the value of social channels like Instagram will become even more important.
The introduction of 5G networks will provide greater levels of connectivity for customers, and support retailers’ ability to create exciting and immersive selling experiences, utilising virtual and augmented reality (VR and AR) applications to remove barriers to buying online. For example, AR could help customers envisage how a new sofa will look in their own living room.
A greater focus on sustainability, including raw materials, sustainability certification, optimal packaging and recycling opportunities, will also change the way retailers approach product development and logistics.
Please describe three characteristics that define the furniture trade you work alongside
Firstly, I’d say innovative. It’s easy to overlook this when surrounded by electronic technology advancements in our everyday lives, but innovation is everywhere in the furniture industry. Textile advancements, product sustainability and design innovation like compact storage solutions are just a few examples.
Secondly, craftmanship is still at the heart of this highly skilled, labour-intensive industry. Many manufacturers offer training schemes, as recruiting a workforce with the specialist skills required can be challenging. I don’t think many customers fully appreciate the levels of craftmanship that go into making a high-quality product like a mattress, despite lying on one every night!
Finally, heritage is what makes the furniture industry special. Manufacturers continue to innovate and modernise product ranges to meet modern customer demands, whilst preserving the brand authority that they’ve often worked tirelessly to build for decades.
