eCommerce Investment Sees Decathlon GROW During Covid-19 Rather Than Suffer – Lesson For Other Retailers?

eCommerce Investment Sees Decathlon GROW During Covid-19 Rather Than Suffer – Lesson For Other Retailers?

Many brands have been suffering during these uncertain times, however Decathlon UK has seen growth due to prior, and on-going eCommerce investment. Could there be lessons here for other UK retailers?

THE FACTS:

  • Decathlon’s (UK) sales rise 10.3% with on-going expansion & investment
  • This has been boosted by an 18.2% increase in online eCommerce sales
  • The year’s gross sales are £277.6m, with £236.5m net
  • Decathlon has planned for a pre-tax loss of £7.5m but this is due to a £4.3m investment & expansion, so is planned. 
  • The investment, means Decathlon was well placed to respond to the challenges of COVID-19, with multichannel and eCommerce firmly in-place.
  • In fact… Decathlon now expects to return to profit in its 2020 financial year, DESPITE COVID-19!
  • Clearly, Decathlon have BENEFITED from eCommerce investment, which appears to have secured their future despite the troubling times, and when so many other businesses are struggling.
  • Could there be lessons here for other retailers around the importance of eCommerce investment?

Decathlon’s investments come on the back of a existing £4.3 million investment in eCommerce back in 2019, as well as supply chain investment to strengthen it’s multichannel sales, as well as a new store opening in Ealing Broadway.

Since then, Decathlon has continued to be forward-thinking, and has introduced as new eCommerce platform.

eCommerce Gives Decathlon A Boost.

CFO & property director of Decathlon UK, Alberto Bottan, said:

“Online has continued to grow strongly (+18.2%) and we keep investing heavily in ecommerce and warehousing to help fulfil growing online demand.
“There are three elements to highlight looking forward:

1) First, all we are very proud to have fully preserved employment during this terrible period.

2) Second we observe a strong acceleration in terms of urban mobility and fitness categories, where we can offer some amazing products to our customers.

3) Finally we are increasing our omni-channel capacities through innovative solutions like delivery from store or very fast, local deliveries.”

Alberto went on to say:

“Last year’s results show a trading period where turnover has strongly improved. And even if 2020 remains a very complicated year due to the Covid impact on retail, we are very confident in our ongoing performances and we aim to achieve profitability by the end of the year.

“We have invested over £200,000 in the training and development of our teams, that are at the heart of our expansion strategy. The teammates are well trained and skilled in our culture, products and the sports in which we operate. Truly, they are a major asset for us.”

Decathlon’s Position In The UK

Opening in 1999, Decathlon (UK) is a Top 100 retailer and the broader Decathlon group, which actually trades in a whopping 57 countries, saw net sales of €12.4bn in 2019.

Could eCommerce Protect Brands During Times of Uncertainty?

It’s clear from the above facts and statements from Decathlon, that they feel investment in eCommerce has benefited their business in both the medium, and short term. Could similar investment in multichannel sales and eCommerce marketing help protect other retailers during times of uncertainty, such as global pandemics?

Considering that during the UK Covid lockdown, online retail sales grew by 23.8% year-on-year in April, which is a 10-year high, and lockdown saw Ocado become the fastest growing brand, it’s clear to see that eCommerce has helped many businesses not only thrive during the pandemic, but actually thrive.

Note Just Larger Brands Benefiting From eCommerce Growth During Pandemic

Whilst the likes of Decathlon, Ocado, and large brands have seen growth during the Covid-19 period due to the benefits of eCommerce, it isn’t only huge brands that have been afforded a level of protection by eCommerce.

As reported in The Guardian, many small businesses have also been protected by a growth in online sales during this period.

The UK is highly active in terms of eCommerce, in fact, it’s one of the best countries to have an eCommerce presence…

According to the Global Ecommerce Market Ranking 2019:

  • The UK has the world’s 4th largest eCommerce market in revenue terms
  • And the the 3rd highest percentage of online shoppers (at almost 80%).

This is only set to continue (or, perhaps, grow). Research by the analysts Retail Economics last year found that 53% of retail sales were expected to be online by 2028. In the wake of lockdown, it seems likely this trend will only accelerate.

 

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