Scotts, the multi-channel retail group which trades under the brand Scotts & Co, has revealed a record sales increase of 34% to £49.3m in the year ended December 31 2020, as consumers returned to print catalogues during Covid driven by a major rise in personalised mailings.
The privately-owned company has also substantially boosted all profitability metrics. It saw a £3.9m upsurge in operating profit last year, with an operating profit margin which rose from 16.5% in 2019 to 25.5% in 2020.
The company has now witnessed a turnover growth rate of 64% since 2018.
Scotts attributes its record-breaking trading performance to two key factors: high demand from UK consumers who have shown a renewed interest in purchasing products through print catalogues, and the company’s decision to substantially expand the distribution of its catalogues direct to consumers via personally addressed mailings.
The company says its higher mailing volumes—from 16 million mailings in 2018 to 32 million in 2020 – have produced significant cost benefits. Coupling increased mailings with strong response rates has enabled Scotts to acquire a significant number of new customers with a low cost per acquisition.
Scotts’ leading catalogue brands – Scotts of Stow, Gift Discoveries, Expert Verdict and Bloom – all returned year on year growth in 2020.
After increasing the size of its active consumer database by 40% since 2018 (it now contains some 5 million named individuals), Scotts claims to have the largest database of affluent mail order customers in the UK.
According to analyses by market measurement firm Nielsen, Scotts now publishes and distributes more mail order catalogues than any other UK company.
Scotts primarily uses personalised direct mail to market to the over-55s with a product range that includes categories as diverse as consumer electronics, kitchen and tableware, home furnishings, gifts, artificial flowers, garden plants and equipment, health and wellness products, jewellery, and fragrances.
By offering third-party advertisers an opportunity to place advertising inserts within Scotts’ personalised mailings to customers, it is claimed that Mail Train Media provides a compelling direct advertising solution that is more cost-efficient and better targeted than press inserts and online advertising.
Scotts chairman and CEO Nigel Swabey said: “In 2020, our teams built on the fast-track growth we put into play in 2018 and 2019. The turnover growth rate obviously accelerated after the UK went into Covid-19 lockdown in March 2020, but the growth pattern was already well-established before the pandemic.
“Our average order values have grown by significantly more than inflation, with an increase in spend of between 10-15% on each order.
“The effectiveness of print advertising is a major reason for this growth. Print advertising stays longer in the home and is more effective at acquiring new customers than digital advertising. Data shows print mailings also drive traffic to our brands’ websites That’s why we are increasing our catalogue mailings almost threefold to around 42 million for 2021. We’re now mailing more catalogues than in our 30-year history.
“The key to driving further growth going forward is our continued focus on new and exclusive merchandise. We’ve strengthened our product development and buying teams over the last 12 months to provide an enhanced flow of new product. We will also continue to invest in new talent, systems and infrastructure.”
As part of its ambitious growth strategy in 2021, Scotts is investing heavily in research and development, additional product categories, and new catalogue brands.
Scotts is launching a new perfumes and fragrances catalogue following its acquisition of The Garden Fragrance Company in March 2021. Later this year, it will introduce new brands aimed at the healthcare and wellbeing sectors, plus an innovative jewellery business under the brand name Aston & Rose.
To support its growth strategy, Scotts is expanding its buying, merchandising, catalogue publishing, and online and offline marketing teams by adding highly trained, experienced talent from both direct commerce and traditional retail. It has also increased the size of its call centre team.
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