Following another set of impressive results, Dunelm’s migration to a new digital platform at the end of last year has helped boost sales and attract new customers while impressing loyal ones.

With insight including:

  • Chief executive Nick Wilkinson on how the new platform will boost innovation
  • DynamicAction’s Michael Ross on why tech must be a “core capability”
  • How keeping tech talent in-house worked in Dunelm’s favour 

Dunelm Farnborough

Dunelm posted a 19.4% jump in pre-tax profits during the 26 weeks to December 28 

Dunelm set out to transform its online offering after streamlining its business – following the closure of the Worldstores website it acquired in 2016 – and last October launched a new ecommerce platform.

And the homeware retailer has already started to reap the fruits of its labour.

Dunelm posted a 19.4% jump in pre-tax profits during the 26 weeks to December 28 as total sales increased 6% to £585m, while Dunelm’s online sales soared 33.2% during the period, leveraged by its new improved platform.

Dunelm chief executive Nick Wilkinson said: “The successful launch of our digital platform accelerates our ability to innovate our customer proposition and we remain focused on operational improvements across all areas of the business.”

And the homeware specialist said it was “delighted with the lack of disruption during the critical switch-over phase”.

The results Dunelm has seen since the launch of the new site are admirable.

A year ago, it did not offer click and collect for its shoppers – today, revenues from click and collect, reserve and collect (one paid for online and the other in-store on collection) and home delivery represent 19.2% of its total sales.

Since the rollout of those services, Dunelm has also noted an improved store conversion rate as customers buy extra items when collecting their online orders.

Dunelm also hailed “a 70% increase in online users at one point” during its peak Christmas trading due to the increased capabilities of the new site – something the previous system would not have permitted.

Speed, search and a faster checkout experience have all improved the customer’s journey since the launch, according to the retailer.

While other retailers have tried and failed to revamp a website successfully – like M&S, for example – Dunelm is leading the way.

Last year, M&S started laying the foundations to be a “digital-first” retailer, but by November the cracks started to show as its online sales edged up 0.2% – less than it had planned.

“It’s very brave to insource technology at a time when many retailers are outsourcing it. If Dunelm owns it and controls it, it can be more agile and responsive if something goes wrong”

Michael Ross, DynamicAction 

Unlike M&S, DynamicAction co-founder Michael Ross says what stood Dunelm in good stead for success was that it sourced all its tech talent internally, rather than outsourcing the project.

“It’s very brave to insource technology at a time when many retailers are outsourcing it. If Dunelm owns it and controls it, it can be more agile and responsive if something goes wrong,” he says.

While Ross adds that Google, Facebook and Amazon all have “massive technology teams” and models for retailers to plug into, a model built internally “has enormous benefits”.

Dunelm cushions

Dunelm has enjoyed improved store conversion rates thanks to the launch of click and collect 

“Most traditional retailers would say ‘We’re retailers, we’ve never been into technology – we need to outsource it’ and that has characterised their thinking over the last 20 years,” Ross says.

“The more forward-looking visionary retailers are now saying technology needs to be a core capability, rather than outsourcing it.”

To do this, Ross says retailers need to invest in creating the right environment for interesting, skilful tech talent to want to join a business – something Dunelm may well have had a head-start in.

After the closure of Worldstores last year, Ross says “it may well be that they retained a lot of their tech-talented people”.

Now, after four years of hard work, Dunelm has transformed its “digital team capabilities and technology architecture”.

But Wilkinson says the retailer is “even more excited by the digital opportunities” that lie ahead.

“We have built a modern, flexible and cloud-native platform, which will allow us to step-change our retail innovation capabilities going forward.”

With its tech foundations laid, Dunelm’s future is bursting at the seams with innovation, talent and loyal customers.