How is the business progressing with the Performance Improvement Plan?
2017 Half-year Results
David Egan, Group Finance Director, looks at the performance during the first half of 2017.
So in regards to the Performance Improvement Plan, I’ve been very impressed with the organisation and how it’s responded, specifically around the three key priorities of that plan.
One, putting the customer back at the heart of everything we do and improving the customer experience. We brought that forward and we’ve seen a nine percent improvement year over year in our global Net Promoter Score.
Number two, putting accountability back into the business. I’ve been very pleased with how the hubs have responded to taking ownership of the P&L again. We’ve had 11 consecutive months of growth within the UK. We’ve been able to stabilise our gross margins and actually improve them over the last quarter, so great progress made on that front. We’ve actually been able to reduce our losses in Asia Pacific by 70 percent in the first half of this year over the first half of last year.
The third point is operating for less. So not only did we exceed our expectations in the second half of the last fiscal year but also exceed our expectations for the first half of this fiscal year. So we’ve increased our guidance around savings to £30 million.
What progress have you seen to date with improving the customer experience?
So the progress we’ve seen to date, I’ll take it in really two steps. One is, let’s talk about the online journey and then let’s talk about the offline journey. So in online, we’ve taken five Agile teams, and Agile is a methodology in terms of making quick, small changes in two to three week sprints, we’ve focussed those five teams around five key areas: search, navigation, content, site speed and mobile. So we’ve now launched a mobile platform on a global basis.
With those investments that we’ve made, we’ve been able to make filtering much easier for our customer base. We’ve seen a 40 percent year-on-year improvement in site speed. We’ve seen a 60 percent year-on-year improvement in terms of our Net Ease Score for our customers. So great progress overall made by our digital team on a worldwide basis.
Now what we’re looking at is taking the Agile methodology offline to improve our stock availability, to improve our proactive communication with customers, and to make the overall customer experience a more reliable customer experience for our customer base.
What are your key focus areas for 2017?
So I think key areas of focus going forward. We have to continue to improve the customer experience. We’ve got to be able to provide an improved on time to performance. We have to make sure that we have accurate, reliable information within our system and that we’re providing the best possible means of communicating changes to our customers. So that I would say is number one. Continue to push to improve the customer experience.
Two, we’ve got to continue to drive accountability within our business. To date we’ve focussed really on the regions and the P&Ls, but we need to drive that same level of accountability within our central functions, so our supply chain organisation, our product and supplier management organisation. So throughout the back office functions, if you will. To improve not only our customer relationships but our supplier relationships which are equally critical in this business.
And then three, I think we have to continue to look for ways to eliminate complexity within this business. We have to continue to look for ways to simplify things within this business. So moving forward we’ll be focussed on making sure that as a company we can continue to look at how we become more progressive, we continue internally to look at how we make things more seamless, and that we don’t forget that this is still a human business and that personal touch is critical to everything we do.