Very Group needs to raise its game to compete with Next - analyst
Very Group may have had a good Christmas trading period but it needs to up its game to compete with a major rival, analysts said.
The company this week reported higher festive sales with premium fashion and sports doing particularly well in the key shopping season.
But GlobalData analyst Kunaal Shah described the performance only as “decent” and talked of “cause for concern” when comparing its figures with those of key rival Next.
Next’s full-price online sales for the festive period rose 45% compared to Christmas 2019, while those at Very grew 21.9%.
He also said: “Online full price branded sales for Next grew 85% versus two years ago while Very.co.uk’s sales of fashion and sports increased 17.7%, highlighting that the clothing giant is vying for share of the branded fashion market and Very must act quickly to compete.”
It has to be borne in mind, of course, that these aren’t exact like-for-like comparisons.
Yet Shah cited both businesses offering impressively fast delivery times but order deadlines are later at Next and its Unlimited Delivery saver scheme “appeals to consumers and encourages brand loyalty, for an annual fee of £20 with which most delivery options are then free”. As has been proved with giant schemes of this type such as Amazon prime, they’re important for keeping consumers within a specify retailer’s orbit. Very doesn’t have a similar offer.
Shah said that Very “must look to at least match – if not better – Next’s online fulfilment proposition if it is to truly compete. The Very Group’s significant investment in its warehouse operations – including its automated Skygate fulfilment centre – has given it the platform to be able to prepare and dispatch consumer orders much quicker than was previously possible.”
And he added that Very needs to ensure that it focuses on growing the product categories — such as wellbeing and sports — that have increased in popularity during the pandemic and look to remain hugely significant in consumers' lives.”
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