Case study: Shop Direct

The unstoppable rise of digital retail

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The incredible rise of internet shopping shows no signs of slowing, and nowhere symbolises the story of the digital retail age better than Shop Direct.

The Liverpool-based company has overseen the death of the historic Littlewoods catalogue tradition after 80 years, taking the brand purely online, and an explosion of additional online retailers.

It was formed in 2005 following the merger of the Littlewoods and Shop Direct companies. Further internet shopping companies were launched including Very.co.uk in 2009 and isme.com in 2011. The group is now one of the largest retailers in the UK, with revenue of £1.7bn. Online orders make up almost 90 per cent of Shop Direct’s sales, around half of which comes from mobile devices, mainly tablets. Very.co.uk now brings in more than £800m in annual sales.

The company’s roots can be traced back to the mail order and football pools businesses founded by John Moores, which became Littlewoods.

Littlewoods was owned by the Moores family until it was acquired by billionaire businessmen brothers David and Frederick Barclay (the owners of Telegraph Media Group) in 2002. By then it was already feeling the impact of the digital shopper.

Littlewoods Home Shopping was launched in the 1930s and in its heyday, more than 25m catalogues were distributed. This number had dwindled to 300,000 copies when time was finally called on the print run earlier this year. The Littlewoods high street stores were sold off in 2005.

In 2003 the Barclay brothers acquired the home shopping division of Manchester-based Great Universal Stores (GUS), renaming it Shop Direct, which was merged into the Littlewoods catalogue operations. The company was renamed the Littlewoods Shop Direct Group in 2005, and further rebranded as Shop Direct Group in 2007.

GUS itself was a retail giant with roots back to 1900. In 2006 GUS split into two companies, Home Retail Group, which operates Homebase and Argos, and credit report agency Experian.

Shop Direct, as it has been known since 2013 when the ‘Group’ was dropped, also bought the online rights to the Woolworths brand, after the high street giant collapsed in 2008, but has now announced it will close the website, signalling what could be the final call for the Woolworths name.

And the digital momentum is increasing. The group’s ‘digital first’ policy has seen it wind down catalogue and call centre operations even further, with proposals to shut call centre sites in Bolton and Aintree. The company aims to dispense with catalogues altogether.

Shop Direct epitomises the changing nature of UK retail over the past century, from family-founded historic high street chains and mail order companies, to an unrelenting surge towards digital. If, when and how the digital bubble will burst, is impossible to predict. But the days of the high street and catalogues dominating consumer spending are slowly fading.