Tuesday, 22 February 2011

Can Dunelm mix homeware with software?

New Dunelm chief executive Nick Wharton has announced he wants to make the firm's website its "biggest store".

The internet is an obvious area of growth for the Syston homeware chain given the service is able to easily piggyback on the group's existing store delivery infrastructure.

Dunelm, which trades as Dunelm Mill, has a 500,000sq ft distribution centre in Stoke, a strong brand and a reputation for value and quality.

Mr Wharton, who last week became the first person to head the company from outside the founding Adderley family, is probably also looking at the online success of competitors such as fellow Leicestershire retailer Next and Tesco. He will also be aware that Marks & Spencer is looking to substantially grow its internet operation.

But all three of these are nationally and internationally known retail brands, and successful online retailing is all about brand recognition.

Despite being the UK's third-largest homeware chain, Dunelm's customer base is highly concentrated in the Midlands and north of England, where the vast majority of its 100 stores are, and so its brand doesn't enjoy anywhere near the same level of recognition.

Given this, Mr Wharton's ambition to make online sales Dunelm's biggest revenue generator is perhaps a little premature.

Dunelm's online success will only go hand in hand with its plans to double its store numbers and spread its name more widely.

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