Best ever sales and soaring profits for Peterborough’s ‘agile’ Ideal Shopping Direct
Record sales are being celebrated at a Peterborough-based multi-channel home shopping company.
Despite the challenges of the Covid-19 pandemic, Ideal Shopping Direct, based in Newark Road, saw sales reach £150.6 million last year - up 16.1 per cent on last year - with profits soaring to £8 million - an increase of £2.2 million over the same time.
In addition, the company acquired 36,000 new customers with 22,000 previous customers reactivating their accounts during the same period.
The outstanding trading figures for the company, which employs 600 people in Peterborough and sells into 31 million UK homes and 35 million American homes, were achieved in the face of intense challenges to the company’s supply chain and trading environment.
Chief executive Jamie Martin and chief operating officer Martin Purcell say the growth is the result of the company’s agility throughout the pandemic, its flexible supply chain agreements in the face of Brexit and a reduced dependence on private-label brands.
Mr Martin said: “In the early days, as well as being open and available for consumers, we were also able to move quickly by bringing forward a lot of stock.”
He said the company had moved fast to meet sudden surges in demand for items ranging from fitness equipment to sewing machines and gardening equipment as repeated lockdowns forced people to spend more time at home.
Mr Martin said: “Early on, we had fitness equipment a lot of online retailers didn’t have, which attracted many new customers who were desperately searching for ways to work out at home.”
Average monthly searches for fitness equipment increasing by 166 per cent and the business moved quickly to meet this demand, experiencing a 40 per cent increase in fitness sales alone.
It was Ideal World’s biggest ever fitness performance and the company also saw a 96 per cent increase in lockdown bike sales from April 2020 to March 2021 – its strongest performance so far.
The start of the pandemic also witnessed an increase in sewing machines sales for the Create & Craft side of the business.
Mr Martin said: “Many sewing enthusiasts started helping out making face coverings and gowns to help those on the front line as they struggled to get PPE.
“Many people decided to invest in or upgrade to a new machine. Others just wanted to start sewing again or as a new hobby.”
It triggered a 45 per cent year on year growth for sales of sewing machines, with stock selling out as quickly as it was delivered.
The company has already achieved its 2021 forecast, with sewing machine orders having tripled in volume.
There was also a rise in consumer demand for outdoor and leisure products during the pandemic heat wave of 2020 with the demand for rattan furniture increasing by 600 per cent.
Mr Martin said that by increasing the range of these products online, Ideal World was able to reach its “buy anytime customers” – those that haven’t seen a TV presentation but are looking online to secure their purchase through Ideal World’s ecommerce offering.
Mr Martin said: “As many big known brands closed stores, this created a unique opportunity for us as many brands came to us for distribution.
“Our branded product count has now gone up considerably. And these are brands that maybe wouldn’t have considered it pre-Covid, including Clarks Shoes and Regatta.”
Ideal Shopping Direct’s UK-based infrastructure has enabled the business to increase its product intake in line with consumer demand.
But for the stock that did need to be sourced from abroad, the company invested £5 million to secure it in one go.
This meant increasing the number of containers at sea from around 80 or 90 to 200, enabling the stock to get through regularly, despite delays of up to 70 days in some cases.
Over the last year, the company has also reduced its dependence on private-label brands, particularly at Create and Craft, with more than 30 manufacturers of craft supplies added to the product assortment.
Mr Martin said: “It is a shift in strategy that is directly benefiting growth right across the business.
“We doubled the sales of our own brand yarn business, Deramores, in 2020.
“This was through an increased margin through selling more of our own brand products, as well as carefully sourcing other products to achieve better margins.
“In an increasingly competitive market, we were able to gain back market share.”
He added: “It would be too easy to point to changing consumer habits, increased time at home and lockdowns as the secret to our success and simply say we were in the right place at the right time.
“Before the pandemic we were already well on the way with our digital transformation, which laid the foundations to navigate these choppy waters.
“And while we may have seen organic growth on our Ideal World TV shopping channel of around 30 per cent to 40 per cent in some weeks during the pandemic, the reality is that our business is now more effective and cost-efficient.
“We’ve done this by identifying and making the right strategic changes, whether trimming cost efficiency, margin efficiency or enhancing overall consumer appeal.
“It’s these small, but essential, tweaks that all add up at the same time to make the business more profitable.
“By continuing to build on our solid foundations, innovate and tweak our business in new ways our evolution and growth is continuing apace.”