We are committed to delivering growth in e-commerce sales through providing speed, convenience and choice to our customers. Following the onset of the COVID crisis and the rapid changes seen in consumer habits, we accelerated several of our planned e-commerce initiatives to offer greater convenience and faster deliveries to our customers. In addition, we are making progress with our plans to modernise the front-end IT architecture of Kingfisher’s banners through the roll-out of our Group digital technology stack. Finally, the Group continues to explore e-commerce marketplace models, with common technology and vendor management, but tailored customer propositions by retail banner.
We believe that the Kingfisher Group’s OEB product development is a significant source of value for our retail banners and their customers. OEB provides a strong point of differentiation for our retail banners in terms of design, functionality, sustainability, and value for money, as well as carrying a higher gross margin. We aim to grow our OEB sales further as we bring even more innovation to our ranges.
We intend to make it easier for customers to shop with us by building a mobile-first, data-led and service orientated customer experience. We also aim to provide customers with a more compelling and complete services offer, including visualisation tools and installation services. More than ever, mobile is at the centre of our customers’ home improvement journeys and experiences, from research and inspiration, all the way through to purchase, delivery, building and installation. We believe that this channel will remain the focal point of the end-to-end customer journey and experience.
We believe that stores have an increasingly important role to play in the home improvement market. Our c.1,390 stores are key to meeting our customers’ needs, whether goods are purchased in-store or ordered online. Stores are a critical feature of the home improvement market, due to the importance placed by customers on inspiration and visualisation, the advice and design expertise of in-store experts, serving as a ‘one-stop shop’ for projects, and the provision of customised services. We believe that the demand for speed and convenience is driving both the shift towards online in our industry, as well as the need for smaller and more localised stores. In response, over the next few years, we have plans to increase our overall store count, while at the same time reducing the average size of our stores.
We believe there are significant opportunities to reduce costs across Kingfisher – in areas such as store productivity, supply and logistics, goods not for resale (GNFR), property (including lease renegotiations), IT and central costs, all of which will benefit from reduced organisational complexity over time. In addition, through the intelligent use of our scale, we expect to extract further value from sourcing and buying. Reducing same-store inventory levels is also a major priority.
We are committed to leading our industry in responsible business practices, seeking to maximise our positive impact on the lives of our customers, colleagues, communities and the planet. This commitment has been at the forefront of our response throughout the COVID crisis. Building on our strong ESG credentials, our ‘Powered by Kingfisher’ strategy sets out four priority areas for Responsible Business, where Kingfisher can apply its experience, scale and influence to achieve a positive impact. These are: