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Interview with Nick Wharton, Dunelm CEO

We chatted with the CEO of UK homeware retailer Dunelm about his first year in the job, opportunities in multichannel and the challenges of recruiting in this space. Find out more below.

Career history:
Dec’10 – present: Dunelm – CEO
’02 – ’10: Halfords – various finance roles culminating in group FD
’00 – ’02: Boots Opticians – director of finance and property
’98 – ’00: Boots Healthcare – head of finance international, regional director Middle East, Africa and Mediterranean –
’96 – ’98: Do it all – business finance manager, head of finance
’92 – ’95: Cadbury Schweppes – financial controller
’85 – ’92: Robson Rhodes and Touche Ross – various accounting roles

You joined Dunelm just over a year ago in a particularly tough time for the retail market. What are the main challenges and areas of opportunity that you’ve looked to address?

It is important to be focused at this time and we are very much sticking to our strategy and not being distracted. Our strategy is very much centred on growth both with physical stores and multichannel exposure. We now have 110 stores of around 30 000 square feet stocked with 20 000 SKUs of home categories. We’re more concentrated in the area between Birmingham and Leeds but see significant opportunity for expansion in the South and South East. We’ve opened 10 new stores in this quarter alone which have been a major contributor to our growth. We foresee opportunities for up to 200 stores in the UK.

We also see big opportunities in multichannel. We conducted research into how customers shop, both on our own e-commerce sites and those of our competitors. It wasn’t a big surprise that that if you’re a trusted retailer, people will shop with you online. We see the potential of this, and this autumn we launched our full reserve and collect service. It gives the customer the ability to research the product online and then touch and feel the product in store. We combine the benefit of the web with the convenience to visit the store, or have the product delivered.

It’s an aggressive successful physical expansion plan when others retailers are decreasing their store presence. What is your formula for success?

Our view on multichannel is that it allows shoppers to buy how and when they want to buy, as such it sits alongside and complements our store offer. However, you can’t use multichannel to underpin a poor proposition and we believe we have a unique proposition in homewares. Our offer provides everything to furnish the home, apart from large furniture and we have the broadest ranges - with prices starting from what the grocers offer, but at better quality, to ranges comparable to department stores but at better prices. We give the customer the ability to choose how much they want to spend, without compromising on quality and therefore appeal to a broad demographic.

Does online success have to be at the cost of your physical stores?

No, we know from our customer research and from our own shopping habits that we have a customer group who want to start and end their shopping online.

How do you rate your current online capability? How do you differentiate Dunelm from the competition?

We work continually to update and enhance our web offer and look to differentiate our offer through design and other tips such as which product blends well with what. We also have the advantage that the majority of our products are own-branded or are ranges exclusive to us. This helps overcome the risk that when products are commercially branded, people want the cheapest price. People trust the quality of Dunelm products and we stand up to this price comparison scrutiny.

Has mobile in the retail market taken off? How does it impact on the choices you provide for your shoppers?

Recent research showed us that at times up to 10% of web visits are from mobile devices. So our plans for the New Year are to introduce a full mobile site, to improve the customer experience and ultimately increase sales.

Which online e-tail start-ups have impressed you recently? Why?

I believe Kiddicare have done incredibly well in creating a strong position in a market where trust is so important. For an online brand to create that trust with parents is impressive. They have a good web experience and fulfilment. Wiggle, the on line cycle accessories website, is also impressive. For a web-site carrying so many products, they have good shoppability and great navigation assistance.

Given that candidates with a proven multichannel approach are fairly rare, have you struggled to attract the right candidates to move your online strategy forward? If so, how have you overcome this?

It’s a difficult part of the market, there aren’t significant numbers of people who’ve moved on to develop the full range of experience and there are supply constraints. We haven’t struggled to recruit though as our growth makes us attractive as an employer. But we’re flexible in our recruitment approach too.

What advice would you give to candidates with a traditional retail background who are looking to diversify their careers into the e-commerce space?

That’s the beauty of retail; it’s just on the other side of the fence to shopping. You don’t need to work in a specific area to know the things that a consumer wants and this experience can be gained in either channel and applied to the other. Although e-tail is growing rapidly, the meat of the UK consumer market is still in physical stores. The harmony is best achieved when the two meet.

For more on the e-tail market and associated hiring challenges, read Graham Lucas, Michael Page Buying & Merchandising director’s article ‘the e-tail boom’.

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