Halfords employs disciplined focus on growth drivers
Halfords predicts the recovery in the economy is still some way off and that early 2010 will be extremely tough for retailers, but it expects its strong market position and plans to develop its multi-channel offer will ensure it benefits from the opportunities a recession throws up. By Glynn DavisSpeaking at the Marketing Society Retail Forum in London David Wild, chief executive of Halfords, stated: “Life is tough but not impossible. The winners will recognise the opportunities and invest to exploit them.”
For Halfords this involves directing capital expenditure to developing both its store estate and multi-channel proposition, with Wild suggesting 60 to 70 new stores have been highlighted and that between 10 and 15 are to be added each year to its existing 466 outlets.
This is being done in conjunction with “leveraging the Halfords brand into multi-channel”. This began in earnest with the re-launch of its website in November 2008 and the decision by management that the company's multi-channel strategy had to be store-centric.
“The website does not compete but absolutely enhances the store portfolio,” he says, adding that the website is used to attract customers into the stores. The big element of this strategy has been 'Reserve & Collect', which has helped increase non-store sales by two-and-a-half times since the website was re-launched.
But since non-store turnover is still only five per cent of total group sales Wild suggests more growth is on the cards: “We've now got a clear and coherent strategy... and there will be growth online, and in store.”
A key part of this multi-channel strategy is the forthcoming launch of 'Order & Collect' that will enable Halfords to extend its assortment by allowing the ordering of products that are only available online and which can then be collected in-store. This provides the capability for the company to massively expand its range beyond even that available in its largest superstores.
Wild also highlighted the group's international development as a future growth driver and area for investment. It has grown to 22 stores in the Republic of Ireland, five in the Czech Republic and one outlet in Poland, which opened in December.
Rather like Halfords strategy in the UK - of being the market leader in its key product categories - the company has the aim of gaining market leadership in a small number of countries.
It has achieved this in Ireland and is looking to replicate it in the Czech Republic and Poland. Helping this strategy, Wild says: “We source very well from the Far East and this will make us very competitive in overseas markets.”
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