Myer full-year results: Loyalty program, online sales bright spots but profits slide

Department store sees net profits slide by 22 per cent in its full-year 2014 financial results but expects stronger year in 2015 thanks to omni-channel, customer engagement efforts

Myer has highlighted stronger customer loyalty and engagement, as well as online sales, as high points in a challenging financial year full of investment, flat sales and falling profits.

Myer reported total sales of $3.14 billion for the year to 26 July, up just 1.2 per cent on comparable store sales basis year-on-year. EBITDA was down 17 per cent compared to FY13 to $253m, while net profits fell 22.6 per cent year-on-year to $98.5 million.

According to the department store’s full-year financial report, the Myer one customer loyalty program was again a big contributor to sales, representing $2.16bn in sales over the 12-month period, or just shy of 70 per cent. During the year, Myer issued more than $50 million in rewards cards, with average spend on redemption a record four times card value.

The retailer said it had also seen “pleasing” results from its engagement and retention strategy for its 3000 platinum members, which launched during the FY13 year, along with continued growth in the Myer Wine Club sales and membership.

“[The loyalty program is an] effective analysis tool providing valuable insights into customer preferences,” Myer stated in the financial report.

Report: Myer’s FY13 results

Myer claimed improved customer services results and a higher Net Promoter Score were also achieved in the past year. Contributing factors included process efficiencies enabling staff to spend more time with customers; a rise in in-store and theatre experiences; and an online booking system for personal shopping and in-store services.

The retailer also noted interactions with its ‘feedback ASAP’ digital customer support program exceeded 42,000 over the 12-month period.

Despite the flat overall result online sales was an area of growth, and Myer said transactions doubled in this area over the past year. Website visits were up 74 per cent to more than 38 million visits in FY14, while sales via mobile and tablet devices continue to increase.

Core to this result was Myer’s enhanced omni-channel offering and the stability, functionality and fulfilment improvements made over the past year. New capabilities include ‘click and collect’ in all stores, as well as iPads for staff in-store. Myer is currently rolling out 1400 iPads to all stores to provide an expanded range of products to customers and give in-store staff a new sales channel, information and order capability.

Another notable change has been expanding the in-house digital team to support marketing and omni-channel projects. This team is now focused on providing content online to further improve customer engagement. The retailer noted that it has 2.2 million email addresses and 3.7 million mobile numbers, along with 317,000 Facebook followers and 71,000 Instagram followers.

Myer CEO, Bernie Brookes, acknowledged the challenging conditions of the past year but said he looked forward to a stronger FY15. He highlighted the new-look management team, which includes recently appointed chief marketing and merchandise officer, Daniel Bracken, as a key driver for better results in the next 12 months.

“As expected, our investments in the business during the year adversely affected profitability, however we look forward to the benefits beginning to be realised in FY2015,” Brookes stated.

Initiatives planned in 2015 include implementing a new CRM system for the Myer one program, as well as a continued focus on building the retailer’s exclusive brands portfolio.

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