Digital Television

Digital Television

In 2008 the UK television shopping market generates sales of approximately £1.4 billion at retail sales value (source: Electronic Retailers Association), of which we have about 10%.

The market is driven primarily by consumers gaining access to TV shopping channels as they switch from analogue to digital television. At the end of June 2009, 23 million homes, 89.8% of all UK households, had access to digital TV ( source: Ofcom ). By 2012 when the analogue signal is switched off, all UK households must have Freeview, satellite or cable television.

Freeview is the most widely available platform, with over 71% of households having at least one Freeview TV.

Ideal World and Create and Craft Websites

Internet Sales

By the end of March 2009, 68 per cent of UK homes had a broadband connection – up from 58 per cent the previous year (source: Ofcom). Mobile broadband connections are also growing strongly, with 10% of households now having a mobile broadband connection.

In 2008 on-line sales grew by 25% to £18.4 billion, 6.4% of retail spend, and is estimated to account for 10% of retail spend by 2013 (source: Datamonitor/ Verdict). The growth of the online population tends to match the demographics of our existing customer base. Our internet sales in 2008 were £22.7m and we see this as a significant area of future growth.

Craft

Craft Market

We estimate that the market for craft products exceeds £2 billion at retail sales value in the UK, this is only half the size of the US market on a per capita basis. We are one of the four main players in a very fragmented market and with the ageing population we see this as a major opportunity for growth.

Our Strategy

Our strategy is to exploit our position as a television and internet retailer to grow sales strongly, whilst maintaining operational efficiency and developing our multi-channel offer.

  • To work with our supplier amd partners to source and develop our ranges to be the best in category in terms of value, performance and quality
  • To build trust and loyalty with our shoppers to ensure sustainable growth for the future of Ideal Shopping Direct
  • To create and develop brands which generate trust with our target shoppers
  • To build on our platform of 2 million shoppers and create a wider platform of loyalty both in the UK market and internationally

Products

We know that our customers want us to provide engaging and demonstrable products, exclusive deals and a convenient shopping experience across a range of price points.

Alongside our existing product lines we are introducing a range of branded products, such as Sony, Karcher, TomTom,Vitamix and Polti, and are extending many categories, such as gardening, food and animal care. We are also trialing broadcasts with a number of high street retailers, which enables us to offer our customers an extended range of products without stocking the products ourselves.

Customer Service

As a home shopping retailer, delivery and customer service are a vital part of our overall offer. In 2009 we took steps to improve the speed and traceability of our product delivery and the quality of our customer service; this will remain an important area of focus for us.

Improving our TV offer

Our Ideal World channel Ideal World is broadcast 24 hrs a day, 7 days a week, 365 days a year (live between 9am – 1am) on Freeview, Sky Digital, Virgin Media and Freesat. Our Ideal World 2 and 3 channels on Sky replay a selection of the most popular shows.

Since July 2009 we have been broadcasting our Create and Craft channels live on Freeview every morning, to complement our Sky Digital channel. Create and Craft has also been on Freesat from September 2009.

Growing our online sales

Our primary growth opportunity lies with the internet, and our focus is on driving our existing TV shopping audience to our websites, as well as employing other established marketing and e-commerce tools. In 2009 we improved the functionality of our websites and introduced a range of new customer marketing initiatives, including email marketing and enhanced upselling offers.

Developing our Craft business

We have a niche position in this market, which we believe has significant growth potential. Craft is our largest category with a number of sales channels, including television, internet, our Create and Craft Club and wholesale. In November 2009 we extended our product ranges and now offer pottery, art, knitting, haberdashery and more. In January 2011 we extended Create and Craft’s live TV shows to 9 hours a day on Sky and Freesat. It is also broadcast live on Freeview from 8am to 1pm.

Operational efficiency

During 2009 we focused hard on the control of working capital and stock management. As a result our cash balance was £9.2m at the 2009 half year compared with £8.4m at the 2008 year end and our stock was £3.0m compared with £3.8m at 2008 year end and down 59% compared with the 2008 half year. A thorough review of the overhead base has taken place and a number of significant cost savings negotiated. Cash, stock and costs will continue to be managed closely.