Company Profile - Very

A Very merry clickmas

The Very Group has enjoyed an incredibly strong year, with its Very, Littlewoods and Littlewoods Ireland brands producing standout performances that helped increase sales nearly 25% YOY. Rachael Simpson-Jones spoke to Ann-Marie Edwards, category manager – Girls & Pre-school Toys, and Nicole Sweeney, category manager – Boys & Outdoor Toys, to find out how the online department store Very approaches the toy category and what it offers its suppliers and customers.

In October we reported a strong set of results for Very - how have the past couple of months been since the run-up to Christmas kicked in?

Ann-Marie: Our most recent full year results showed record breaking growth in 2020, and in October our Q1 results revealed that The Very Group was still trading at almost 10% up YOY with growth across all categories. Electricals really fuelled this growth, driven by huge demand for new games consoles such as PlayStation 5. With the end of lockdown we’ve seen an uplift in other categories that r eflects modified customer behaviour.

What factors are behind this performance? How much do you feel the pandemic has had an impact on your business?

Ann-Marie: The pandemic really accelerated our growth and helped drive a substantial influx of new customers that have migrated to The Very Group’s brands for the first time. As a business we’d become more reactive to market conditions over the last 12-18 months, pivoting our trading and marketing plans to ensure our stories continue to resonate with customers. For example, our latest Christmas campaign, ‘It’s the Very Best Excuse’, focuses on the fact that we didn’t get to enjoy a big Christmas with our friends and family last year, whereas this year we have the excuse to really let our hair down and celebrate.

From a toy perspective, we’ve maintained share in a difficult market – it’s been tough. Sales this year have been erratic since August, but we are confident that we’ve outperformed the market and our pre-Christmas numbers in those final few weeks were really strong. The wider performance of the entire business reflects the resilience and relevance of our trading model.

Have you seen signs that customers shopped earlier this year than in others?

Ann-Marie: Absolutely. We know from our data that Very customers love shopping early, so much so that we go out with an annual Christmas message just after the August bank holiday. This year we released our Christmas TV ad a month early, in the first week of October, and we’ve seen the benefits of that decision reflected by our sales.

We’ve seen a big surge in the amount of online shopping by customers, as well as the number of retailers offering an online service. What sets Very’s online shopping experience apart from a customer facing POV?

Annie Marie: Two obvious things spring to mind. Firstly, we’re a ‘department store’ with a wide range of offerings in all the biggest categories, and all the best brands too. Customers love our flexible ways to pay: our Take 3 payment option on Very.co.uk is one of our most popular ways to pay. There’s a lot customers don’t see that goes into making Very what it is. We’ve invested heavily in our digital customer experience, such as our website assistant and app that can answer queries quickly, and embedded AI on product pages that can make recommendations based on customer browsing data. We’re also improving the copy and imagery on product pages to make it easier for customers to understand the offering and make informed purchasing decisions. We’ve also got an incredibly loyal customer base of over 4m and an excellent NPS (Net Promoter Score) which is almost double the retail industry average. This tells us our customers appreciate what we do.

One thing we’re really proud of is our Stockless Fulfilment capability, which gives us the ability to offer a very wide range within key brands by tapping into stock and sending it directly to customers. This is an element we’re really excited about for the future. We’re in talks with a couple of major toy brands with a view to expanding our Stockless Fulfilment into this space over the next 12-18 months.

What have been your best-selling toys and most popular licences during the past eight weeks, and why do you believe these have been performing so well?

Nicole: It won’t be news to anyone that stock has been a real challenge over the past couple of months. We focused heavily on ensuring we could secure stock of the biggest toy brands for our customers, especially ahead of Christmas. With our customers shopping earlier than ever this year, and with toys being such an important part of the festive season, it was crucial we kept on top of this.

We introduced initiatives with some of our key brands to bring stock in earlier in the year, including Barbie, from Mattel, and Lego. Our standout products include the Barbie Day to Night Dreamhouse, which is probably our No.1 line in Girls Toys most weeks, followed by the Barbie 3-in-1 Camper. Lego is a phenomenal brand for us. Evergreen properties Star Wars and Harry Potter continue to grow every year. Both brands span a wide range of price points that appeal to customers and offer plenty of choice. It’s no surprise they were key in the run-up to Christmas. Around 96% of our customers are credit customers, and our business proposition allows them to trade up for what they want. Big box items have been selling through strongly this year.

So would you say basket spend was up this Christmas?

Nicole: Our insight suggests its up 6% YOY. Based upon the stock we secured, the price points they sit at and the sell-through of larger items earlier in the season, I think it’s safe to say it is indeed up.

Which toy and game suppliers do you work with most closely, and what makes Very a good partner for them?

Nicole: We have a very diverse mix of categories under our Toy remit, and a very diverse mix of suppliers as a result: over 60 across everything from Arts & Crafts and Dress-Up to Outdoor Toys and Plush. Very enjoys excellent relationships with all its suppliers; each range adds value to every one of our categories in some way. Our strategic partners, particularly Mattel and Lego, have led the way in recent years with their digital marketing investment, willingness to test things and learn along with us, and innovative approach. They understand Very’s customers just as much as we do, and as a result can build out plans that are specifically tailored to our target market.

We develop joint business plans that are totally aligned in terms of aim, using the vast catalogue of data and insights we have on our customers to drive traffic to exactly where it needs to be, taking into account what matters to our partners as well as to us. Bespoke, targeted campaigns fuel conversion and that’s what our partnerships result in.

What is Very’s general approach to selecting and ranging toys and games online?

Nicole: Our ambition is become the online destination of choice for the latest must-have toys, so offering a diverse range of categories and best-selling brands is vital. We’re set not only on offering the most sought-after toys out there, but also catering to all ages and interests. Our planning starts 12 months out, and we use the data I mentioned earlier to help us form a picture of what’s right for our customers and what aligns with our business proposition in terms of pricing, SKUs, margins etc. As we narrow down the selection process, we always keep these two basic tenets in mind, but we’ll also have a strategic plan in place according to category. As an online business we need to remain flexible at all times.

How does Very support its offering in terms of marketing and promotions?

Ann-Marie: Toys will always be featured in our overall Christmas campaign, of course, and the messaging often has a tongue in cheek feel to it. Over the past year, we’ve collaborated with our partners to deliver fresh and exciting campaigns across all our ranges, including bespoke activity. For 2021, we had a multi-supplier Christmas toys campaign which leaned heavily into influencer activity and social media competitions. We also landed our first ever cross-category solus kids’ campaign across social and digital media, which again utilised the influencer space. It also involved brand partnerships; we worked with Disney in March, April and May 2021 to showcase our licensed Disney offering to a wider target market.

We also undertake on-site marketing. Our customers love being organised for Christmas, so every autumn/winter we curate a list of musthave toys – the biggest and most exciting things we see coming through – and support that with bespoke digital content that showcases each toy in a creative way. In 2021, we wanted to tell stories

that would help customers with their purchasing decisions. The stories we told included sustainable toys and how to buy something eco-friendly, toys that could help learners at home, continuing a trend that developed during lockdown, and the future of toys, which involved a lot of tech toys and innovation. We have plenty of plans that will build on this approach going forward.

What major opportunities for your toy/ games business do you feel 2022 has in store?

Ann-Marie: This year is all about movies: the calendar is jam-packed with releases and there’s some hugely exciting product on the way. We’re particularly looking forward to Lightyear, Minions and Jurassic World, which we know will translate perfectly into toys. Licensing is key for us, so we’ll continue to build on our cross-category plans. Our Fashion team has built a very strong kids’ licensed offering in the past 12-18 months, and to bolster this we’ll be doing a lot more with our licensors to showcase our entire licensed ranges, giving each property more exposure and customers more choice. We also know there are some evergreen brands that resonate with our customers year in, year out, so we’re also putting plans in place to grow these ranges further as well as gearing up for the latest new content.

Will Very’s toy buyers be attending any of the major Q1 trade shows in person next year?

Nicole: London Toy Fair will be our first opportunity in two years to get out there and reconnect with our supplier base, and we’re really looking forward to it. Seeing the product in the flesh is key. London is the big one for us. There are probably 30-40 active Very suppliers at the show, and those three days offer the perfect chance to catch up with them. Of course, we’ve also carved out time to look for the fresh and new, and to consider ranges and suppliers we’re not currently involved with. Following lockdown, there’s some great new innovation out there, and we’re keen to go and find it.

Ann-Marie: We’re optimistic and excited for the months ahead, and we’re looking forward to working even more closely with our brands and partners. There’s a lot of new product out there and it feels like we’re in for a great year.