For many, shopping is often regarded as a national pastime. Indeed, despite the credit crunch biting and many high street retailers reporting a fall in sales, British online shopping is booming, while the country’s mail order market has returned to growth.
This bodes well for JD Williams, the home shopping subsidiary of N Brown Group. It sells clothing, household and electrical products through mail order catalogues and online shopping channels, targeting consumer groups often not served by the high street, such as mature and larger women.
Internet shopping, for example, is growing at the fastest rate in six years, according to figures from retail research firm Verdict Research. The figures, published in June, show that online spending rose by 35% to £14.7 billion last year, while the number of online shoppers increased by 24.7% to 22.6 million. This rate of growth, which is almost 10 times that of the overall UK retail market, is predicted to continue. Online retail spending is forecast to rise to £44.9 billion by 2012, amounting to 13.8% of the total UK spend through retailers.
Overall, the mail order market saw its strongest growth for nine years in 2007, with sales rising 6.2% year-on-year to £9.9billion in the UK. This is a marked change from the previous four years, which saw sales decline.
N Brown Group has witnessed at firsthand this growth in online and mail order sales. Its full-year results to 1 March 2008 show a 16.6% rise in group revenue to £610.9m and a 19.4% increase in group profit before tax to £78 million. In addition, its interim trading statement, published on 1 July, showed a 12.3% increase in group turnover for the 17 weeks ended 28 June. The firm’s online sales have also continued to increase and now account for 31% of its total sales, having risen by 45% in value. Miranda Rosenbaum, reward manager for N Brown Group, explains: “We were initially very focused around catalogue shopping, but with the growth of the internet, the online side of things is growing all the time.”
But posting such financial results doesn’t mean the firm is prepared to ignore the impact of the credit crunch and rising inflation on the economy in general. Rosenbaum says the economy has been taken into account with regard to pay.
“The biggest challenge for the group over the next year is for the company to remain successful in such a difficult market. We knew this year would be a difficult year for employee pay rises. When it came to pay reviews this year, staff may have expected more, but you have got to act according to the credit crunch and what the market is recommending in order to remain successful as a business,” Rosenbaum explains.
Making changes As a result, it allocated a 3% pot for staff pay increases across the board, recommending that they should be treated equally, except for exceptional circumstances. “We didn’t want to send out any strong messages [about] taking from Peter to give to Paul,” she adds.
This restriction on pay increases has placed the company’s benefits package even further under the spotlight. Since joining the firm approximately 18 months ago, Rosenbaum has worked hard to ensure it has a competitive benefits offering and staff know exactly what perks are available to them.
Both the benefits package and its communications have also undergone a significant revamp during her tenure at the company. “We had a benefits package that was great, but perhaps hadn’t been communicated on an on-going basis as well as it could have been. It was put together four or five years before I started, so when I came that was why the next project was to revamp this. In its day, it was brilliant and it was just what the company needed. [The benefits booklet] was very focused on page-by-page employee discounts, and in the middle you had the core benefits. So, the first thing I wanted to change was to pull out the core benefits that were only mentioned in a couple of lines and do as much to communicate them as possible to reverse the strategy, so we were really promoting the core benefits. Then there was the issue with everything else in the booklet being out of date,” she explains.
The first step on the road to revamping the firm’s benefits package was reviewing the perks that were on offer to ensure they were still relevant to staff. Alongside its range of core benefits, which includes life assurance, long-service awards and an employee assistance programme among others, now sits an updated range of voluntary benefits under three main headings: family and financial, health and wellbeing, and travel and leisure.
One of the biggest challenges was revamping the communications around the package and building a single benefits brand. The result was ‘Mybenefits’, launched in June, which is the umbrella under which all the company’s benefits now sit. Employees are given information about the perks both online and via a benefits booklet. Rosenbaum explains the company originally considered moving its scheme wholly online, which would have enabled it to make any future changes at little cost. “We initially looked at taking this onto an all-encompassing online offering, where we would just offer an online benefits site for those who have got internet access. We went down that route first and shopped for some suppliers to get total reward statements online and communicate all [perks] through an online system. But, after a full evaluation, as a company, we just weren’t ready to leap to this sort of system,” she says.
A big issue for the company is that about two-thirds of its workforce does not have internet access at work, and would have been unable to readily view information about their benefits. “You have to look at where the company is and where the culture of the company sits when you’re aligning anything, looking at moving a reward or benefits strategy forward and taking this to the next level. We have an online [business], however, it isn’t a totally online operation. There are some [employers] out there that are much more advanced, which is great but, as a company, we are not ready for that yet. We’ve got two-thirds of the [employee] population who don’t have access to a computer, so that was a challenge around Mybenefits,” explains Rosenbaum.
Promoting perks As a consequence, the decision was made instead to issue a booklet, containing details of employees’ core benefits, as well as putting the information online. Within this pack, individual factsheets detailing the range of voluntary benefits were then inserted. Rosenbaum adds this will make updating perks relatively straightforward. Setting out information in this way also means the company can tailor this to suit its monthly and weekly-paid workforces. “When we launched the [voluntary benefits] package, we tailored it slightly. It was trying to tailor the factsheets in line with what staff would most benefit from,” says Rosenbaum.
This helped when dealing with the company’s two main groups of staff: those who are paid weekly and those who receive a monthly salary. Its weekly-paid customer service agents, for example, work in a heavily-unionised call centre environment, which is particularly vociferous when it comes to pay and benefits negotiations. This has led to slight differences in their core benefits provision. Unlike other staff, for example, they receive an employer-paid cash plan.
Overcoming employees’ previous lack of understanding of the reward package and raising awareness of what they were entitled to was therefore crucial. Rosenbaum was also keen to boost take up of perks, such as the firm’s share option scheme. “When I came to the company, the only method of communicating this benefit was in a few lines of the core benefits section of the old booklet. When we launched the benefit each year, we would write to those who were eligible, hope they understood the documentation and hope they would apply to [the scheme]. This year, we went across sites, delivered presentations and increased take up by 30%. Next year, I intend to try to increase take up further.
“One of the things I am conscious of now we have launched Mybenefits is that everything to do with benefits and reward will sit under that brand. So next year, rather than Halifax sending out a letter, which is an invitation to apply to the share plan that we have used for the last 10 years, we will take on the project, re-write the documentation, [and] refer it back to Mybenefits,” she says.
Looking back at how far the company has come in such a short space of time, Rosenbaum has just one thing she would do differently. As the launch of Mybenefits occurred during a busy operational period for the HR department, it wasn’t promoted as much as she would have liked. “If there’s anything I could have fallen down with, it was not doing more planning around promotion prior to the launch,” says Rosenbaum, who did not want to delay it.
But she is by no means finished yet, and is keen to keep the scheme fresh by developing communications, for example, by promoting specific benefits at key times of the year. “The general philosophy and plan for the strategy is to move to a total reward environment. That’s my goal: to take Mybenefits into Myreward,” she concludes EB Career profile Miranda Rosenbaum, reward manager, joined N Brown Group in March 2007 from Pearson Vue, the computer-based testing solutions division of Pearson, where she held the role of systems and benefits officer. “I was looking after benefits and reward, but it was on a small scale as everything was centrally driven. In addition to that, I was responsible for the HR system,” she says.
She decided to move on in order to pursue a more reward-based role.
It is her work at N Brown around the launch of its Mybenefits scheme and communication that Rosenbaum is most happy with. “I am extremely proud of the launch of Mybenefits and bringing all of the benefits together under one umbrella for employees. Having the challenge of such a diverse workforce [where] you’ve got quirky, fashion-conscious buyers and the merchandise department, you’ve got call centre agents, you’ve got warehouse operatives and everything that falls in between, [then] to bring everything together [in] a generic piece of work and fit in with all those goals [is an achievement]. I would say my biggest achievement is taking this piece of work and making it into something relevant and tangible,” she says.
N Brown Group at a glance N Brown subsidiary, JD Williams Group, can trace its origins back to 1859 when James David Williams opened three mobile shops and a retail letter order trade. It was the first retailer to make use of the UK’s parcel post system to send products direct to customers. In 1921 JD Williams became a private company.
In 1970, JD Williams shares were acquired by N Brown Group. Over the years, the direct home shopping retailer has acquired a number of businesses in order to extend its product range. It now operates just under 30 brands, which enable customers to shop using catalogues and online.
N Brown Group employs 3,300 employees, 56% of whom are female. Its workforce has an average age of 36.5 years, and an average length of service of five and a half years.
In the 53 weeks to the year ending 1 March 2008, N Brown Group announced a 16.6% increase in group revenue to £610.9m, a 20.3% rise in group operating profit from continuing operations to £91.8m and a 19.4% increase in pre-tax profits to £78m. Its interim trading statement, published on 1 July, meanwhile, showed a further 12.3% increase in group turnover. Its online sales, which now account for 31% of total sales, also rose in value by 45%.
What are the benefits? • Defined benefit scheme, which is closed to new entrants. • Non-contributory trust-based defined contribution (DC) scheme for weekly-paid staff, to which the company contributes 2%. • Stakeholder scheme for all monthly-paid staff to which employees contribute 3%-6%. Matching company contributions up to 6%. • Company-paid private medical insurance (PMI) for senior monthly-paid employees. Discounted PMI available through voluntary benefits scheme for all other staff. • Healthcare cash plan (employer-paid for call centre staff), dental insurance, gym membership, health screening, laser eye correction treatment and discounted cosmetic surgery all available to staff on a voluntary basis. • This is 23 days a year as standard, with the option to buy additional days for most employees. • Staff receive an extra day off at Christmas, the date of which is decided on by the chief executive. • Employee assistance programme available through the Retail Trust. • A range of discounted products and services available through voluntary benefits package. • Discounts on the company’s own products.
A popular package Emma Taylor, group procurement manager, has worked for the company for two-and-a-half years, after spending18 months with the organisation on a consultancy basis. She is responsible for advising people on the expenditure of indirect funds.
Since the launch of the company’s Mybenefits scheme in June, she has made use of several voluntary benefits, including discounted retail vouchers and airport parking.
“You can see a financial benefit to it immediately,” she says.
She adds that the savings can make quite a difference, while the vouchers are also great as presents.
Taylor particularly likes the option that enables staff to access their benefits online. She finds it “a lot easier to find everything” than was the case with the company’s previous benefits package.