Loyalty boosts Dymocks performance
With 65 stores in Australia, the 136 year old family-owned franchise business sold more than 10 million books last year, and bricks and mortar plays a vital role in its business model.
According to Dymocks MD, Steve Cox, the book industry went through a challenging period when RedGroup Retail, the parent of Angus & Robertson and Borders, collapsed in 2001 amid a massive downturn in consumer spending, the rise of internet book sales and a high Australian dollar. At the time, many expected the online world to kill off the bookshop.
But Cox told Inside Retail PREMIUM: “We’ve been delighted with growth in recent years. Bookstores remain a strong part of the Australian retail mix and books in general have enjoyed somewhat of a resurgence over the past couple of years”.
In its 2014 financial year, Dymocks recorded eight per cent growth in sales across its store network and is ahead of this in the current financial year on a year to date basis.
What’s aided Dymocks’ growth has been its strong brand and franchise model.
“Our franchise owners are passionate and knowledgeable. They operate in their communities and know their books and the people who walk into their stores,” said Cox.
“They are absolutely committed to delivering outstanding service and personalised recommendations.”
Also crucial has been Dymocks’ Booklovers loyalty program.
“We now have just under 900,000 active members,” said Cox.
“Over the past couple of years, we have brought some science and rigour to the analysis of our data and transformed the way we communicate with these customers to reduce churn and increase visitation and the basket size of the spend in our stores.
“It’s been tremendously successful and we can actually track the improvement to the month we changed the way we communicate with these customers two years ago. Since then, we’ve achieved growth every single month across these members in what is obviously a challenging market.”
The data provided by the program is also invaluable.
“For example, three years ago, we would not have known if our top spend customers stopped shopping with us. Now the system recognises when they don’t shop with us for a period of time and then communicates with them through targeted emails with various offers enticing them to reconnect with the brand. The return of these customers is three times what it was previously.”
Dymocks has also been extending its in store range, complimenting books with non-book products such as cards, wraps, personal stationery, and book related gift items.
“Our goal here is to attract people to our website on things other than just buying a book,” said Cox. “Customers absolutely value feedback from our teams and other booklovers. The forum is already stimulating sales through the stores.
“Over the long term, we will continue to invest in the digital space. We don’t see it as omni-channel, multi-channel, whatever. We just see it as providing our customers with a unique customer experience across all of our channels and that the instore, physical, and online really need to come together.”
The future, according to Cox, will be both online or in bricks and mortar stores.
“We don’t differentiate one from the other. Around eight of the world’s top 10 biggest online retailers have physical stores and some of the key online players are looking for physical stores.”
Stores, he says, give Dymocks a huge competitive advantage.
“Our customers value the convenience of being part of their local community… but at the same time, we want to be able to leverage the benefits of a digital space to create endless aisles in our stores.
“People shouldn’t be limited to what’s on the shelf in the store. They should be able to buy any book that they want and use the digital space to help in that transaction. We trade online. We trade instore, but ultimately, we want our booklovers to experience a consistent and exciting proposition across both channels.”
Next up, says Cox, will be the ability for customers to ‘reserve and collect’ books.
“It will be a seamless ‘go online, pick up instore’. Our range online will soon be 18 million titles. You can never hold all of these in any individual store, but we can help our customers browse that range and if they want to, pick it up in their local store,” he said.
This story first appeared in Inside Retail PREMIUM issue 2045. To subscribe, click here.
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