service revolution
Offering a significantly enhanced retail experience for our customers and colleagues is imperative.
In the last two years we have reduced the number of store colleagues by around 1,500, but at the same time increased the average weekly contractual hours worked per colleague from 17 to 25. We also overhauled the recruitment process and launched the 3-Gears training programme. All of these are designed to increase colleague loyalty, engagement and product knowledge and expertise, which in turn leads to improved customer service. This has been evidenced by an uplift in the net promoter score from 55% in the final quarter of FY13 to 77% in FY15. In addition, turnover of colleagues within three months of joining has reduced from over 20% in FY13 to 9% by the end of FY15. Our Retail engagement score has increased from 64% prior to the launch of Getting Into Gear to 81% in April 2015, and Halfords climbed to 18th in the 2015 list of Sunday Times Best Companies To Work For.
Our 3-Gears training programme continued to be rolled out: by the end of FY15 nearly all store colleagues had attained Gear 1 accreditation, 46% had qualified for Gear 2, along with over 300 colleagues at Gear 3 level. On top of the 3-Gears programme we operate management development training programmes, "Aspire" and "Accelerate", which helped us to fill around 60% of store management vacancies internally.
OUTLOOK
By the end of FY16 we aim to have 80% of store colleagues through Gear 2 as well as two Gear 3 colleagues per store. We will also turn our attention to annual as well as three-month colleague turnover.
the 'h' factor
We are ensuring that Halfords has the products and services that our customers want and that they choose us as their number one destination to get them.
In order to do this, our products and services in Auto, Cycling and Leisure are constantly growing and evolving. Within Auto we have launched Car Parts Direct, giving customers access to 130,000 car parts that were previously out of reach through Halfords. In Cycling we have launched a new bike brand, 13, as well as continuously refreshing and updating our ranges, including a new junior range within Boardman and relaunching our Carrera brand. The acquisition of Boardman Bikes in June 2014 gives us the opportunity to leverage the brand, as evidenced by the recent launch of a Boardman clothing range.
Another key part of "H" Factor, is our growing involvement in the wider community, which is explained in more detail later in this review.
OUTLOOK
Looking ahead, we will be introducing new ranges in children's bikes, VooDoo and Boardman, as well as plugging some range gaps, including the introduction of female bikes in both the 13 and VooDoo brands. Our involvement with the women's cycling Breeze partnership will increase and we will teach bike maintenance to even more children in stores and in schools. In Auto we are launching new products, including a number of exclusive branded items, as well as implementing an extended range marketplace, which will further increase the quantity and range of products available to our customers.
stores fit to shop
Our journey to improve the overall Halfords customer experience also requires changes to our physical footprint.
We have been learning as we progress through our refresh programme and we now have a menu of options available to apply to stores, ranging from a simple "space swap" to a full refresh. By the end of the year we had refreshed a total of 72 stores, with positive response from customers and colleagues. 41 stores received a "space swap", which involves optimising space allocation without changing the look and feel of the store, and 405 stores were implanted with the new cycle repair operating model, involving dedicated work stations, new tools and highly-trained mechanics.
Another part of Stores Fit to Shop is Cycle Republic, a new cycling-only store format targeted at the areas in which Halfords is under-represented: city centre locations, especially London, and the more premium and enthusiast sectors of the cycling market. By March 2015 we had opened four of these shops.
OUTLOOK
We anticipate refreshing a cumulative total of around 150 stores by the end of FY16. Additionally, the performance of our Cycle Republic stores to date has given us the confidence to open around 11 more by April 2016.
21st century infrastructure
Our ability to offer great service and products in-store and online is built upon a solid infrastructure.
At the outset of Getting Into Gear we explained how we needed to invest in our IT infrastructure. The first step was to fix the basics, including an upgrade to our SAP system and a consolidation of data centres. This has provided a secure and stable foundation on which to make further improvements and launch new initiatives, such as an eBay shop. Tablets were rolled out to all stores during the year.
No child went without their bike over Christmas and our website was stable and high customer service levels maintained throughout the Cyber Weekend peak. FY15 was, however, a challenging year for our Warehouse & Distribution function, but we have learned a lot and have a medium-term plan going live in summer 2015 designed to maintain high customer service levels whilst mitigating future cost increases.
OUTLOOK
The year ahead will see improvements to store till hardware as well as a roll-out of electronic vehicle registration lookups. Within logistics, we'll embed our medium-term transport solution and review the optimal long-term options.
click with the digital future
With changing customer shopping habits, online sales are becoming an ever increasing proportion of our total sales, particularly for cycling and technology products.
Since relaunching our website, including a mobile-enabled version in FY14, we have focused on continually upgrading and developing our online proposition. During the year this included the launch of Click & Collect in Ireland, live chat and online number-plate ordering. In November 2014 we launched an eBay shop, opening up a new channel for customers to shop with Halfords, and in March 2015 we refreshed the main website design, improving the customer journey and creating seasonal zones.
Over 90% of our online sales are picked up in store, driving footfall into our shops and enabling us to showcase our service offers and expertise.
Our social media presence has been strengthened, including an in-house digital studio that enables us to keep our YouTube site well stocked with product reviews and "how to" guides. One of our campaigns, the Bike Whisperer, was award-winning during the year.
OUTLOOK
In the year ahead we will commence development of a transactional Cycle Republic website as well as launching the extended range marketplace. We will also be making Halfords stores available as locations for customers to pick up parcels ordered from other selected retailers, giving us access to a new customer base.