How Next clicked into top gear
Silver fashionistas head online to one-stop retailer
NEXT raised profit guidance after an army of silver fashionistas helped boost the retailer’s online sales.
The over-60s were the fastest growing group of customers on Next’s website in the last 12 months reflecting how older consumers have taken to online shopping.
The FTSE 100 retailer, the UK’s largest High Street fashion chain, has more than 800,000 active customers aged 60 and over, an increase of 49pc compared to the year before.
The firm is attempting to become a one-stop shop for fashion, by hosting dozens of High Street brands online.
Next says this strategy boosts sales of its own-brand products as well as attracting customers from rivals such as Asos.
Retail analyst Richard Hyman said: ‘Silver fashionistas are changing the way they shop. Next is in effect following the money. Older people are becoming less well served in high streets, and they’ve got money to spend.’
By successfully targeting older women Next has achieved what Marks & Spencer longs to do.
Marks & Spencer used to be the go to brand for the older woman, but has failed in recent years to entice them.
The revelations came as the company reported strong pandemic results, posting a £342m profit before tax in the year to January 2021, down 53pc from £729m the previous year.
At the start of the pandemic boss Lord Wolfson had predicted profits would be reduced to zero. Despite months of store closures, sales fell by just 17pc to £3.6bn, down from £4.4bn the year before, as sales shifted online.
Next has started 2021 with ‘stronger than expected’ online performance, allowing it to increase profits guidance for the year to January 2022 from £670m to £700m. The retailer will need to shift over half-a-billion of sales from stores to online to hit the figure, and avoid further lockdowns after April 12. Next did not declare a final dividend and the share buyback programme remains suspended, but shares rose 3.2pc to 8114p – a record high.
Older shoppers have taken to buying clothes online for the first time in the pandemic, both out of necessity and because of the changing winds in mid-market fashion. Next has targeted them with Laura Ashley, Monsoon and Cath Kidston all available on the Next website alongside the likes of Samantha Cameron’s Cefinn. Next has 130,000 third- party branded items on its websites, helping its total offer to grow to 202,000 different items – almost seven times the 29,000 products it sold online five years ago.
John Lewis last month announced it would add 50 new fashion and beauty brands, ranging from start-up and independent brands to household high street names, adding to 30 additions last year.
And Marks & Spencer has bought Jaeger out of administration as well as green clothing company Nobody’s Child, dressmaker Ghost and Early Learning Centre toys to expand its range online. Wolfson, 53, said: ‘The growth of the demographic, amongst the over-60s and under20s, is because we have so much more choice, so we are appealing to way more people.
‘And 60 is not as old as it used to be. The shopping pattern of people in their 60s isn’t dramatically different from other age groups.’
Next also hopes its new model will encourage brands to join its Total Platform, which offers smaller brands access to its industry-leading warehouse and logistics technology.