Loyalty program, brand awareness gains help Baby Bunting deliver strong H1 FY2022 results

Retailer highlights growth in customer loyalty program member, NPS lifts and rapid rise in omnichannel sales

A 17 per cent lift in active loyalty members, increase in unaided brand awareness, higher Net Promoter Score and significant omnichannel take-up are among the highlights touted by Baby Bunting in its half-year report.

The retailer reported a 10 per cent increase in comparable sales growth in the first half of FY2022 to $239.1 million, 23.8 per cent of which was sales conducted online. Total online sales including click-and-collect were up 32.6 per cent to $56.8m. Other notable financial results include an EBITDA lift of 18.6 per cent to $21.8m and NPAT growth of 16.8 per cent to $12.5m.

Two years on from a brand modernisation project, the strength of the Baby Bunting brand and its customer engagement were repeatedly emphasised in the FY22 results.

One of the big initiatives was the launch of the retailer’s ‘Baby Bunting Family’ customer loyalty program in FY21. Baby Bunting reported 1.3 million customer loyalty program members in the H1 FY2022 results, including 700,000 active members, a lift of 17 per cent year-on-year. Customers receive a loyalty voucher upon joining the program then can earn $10 vouchers for every $200 spent, as well as bonus vouchers for milestones and free lay-by.

The retailers noted it’s seeing a higher frequency of spend from members, and previously noted 36 per cent more per transaction in its FY21 report. Members were also found to be re-engaging at significant milestones including subsequent births. Overall, Baby Bunting spent about $2m on the loyalty program during the H2 FY2022.  

Phase 2 of the loyalty program will include the launch of a loyalty system and focus on personalising offers and expanded benefits. It’s due to kick off mid-2022.

Baby Bunting also reported a 13 per cent lift in its unaided brand awareness scores to 88 per cent in the first half, significantly higher than other retailers selling baby hardgoods. Its NPS was also up +1 to +88.

However, Covid-19’s impact was felt, in terms of supply chain, limited staff furloughing and some operational project initiatives due to be delivered in FY21 and FY22. These included efforts to harness data and analytics for business decision making and implementation of new merchandise financial planning systems to better help with forecasting.

This didn’t stop the debut of a new headless ecommerce architecture, which the company pushed live across both Australian and New Zealand online channels and is part of broader efforts to improve omnichannel retail experiences.

As the online sales figures make clear, Baby Bunting’s results show the rapid digitisation of retail also driven by the pandemic. Click-and-collect sales grew 46.4 per cent to make up 59 per cent of all online sales in catchments where Baby Bunting has a store. The company said this meant about 90 per cent of all sales involve a customer store visit in these catchments.

Commenting on the results, Baby Bunting CEO and managing director, Matt Spencer said it had been an exceptional first half in the midst of challenging conditions.

“Through great work by the Baby Bunting team, we achieved record sales and grew gross profit, without compromising value to the consumer. This contributed to a significant growth in NPAT,” he stated.  

“We operate in a less discretionary category supplying the essential needs of new and expectant parents. As such, we were pleased to keep all of our stores open for our customers during the lockdowns that occurred in the first half. Our store performance was supported by our strengthened digital offer, including click-and-collect and online sales.   

“Our merchandise and supply chain teams have done a fantastic job in ensuring that we have maintained high levels of inventory during these times. We are excited about the balance of the financial year and are working hard to drive further sustainable growth and meeting the needs of our customers.”      

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