In a harsh retail environment that yesterday added confectionery chain Darrell Lea to its list of scalps, Big W's sales have shrunk for nine of the past 11 financial quarters, excluding the benefit of new store openings.
However, unlike many retailers, the trend at Big W has improved over the course of the financial year to the end of this month -- a trend managing director Julie Coates attributes partially to increased internet sales.
Big W currently has 20,000 individual items for sale online, more than double the level of 12 months ago, and Ms Coates is planning to lift this beyond the 80,000 product lines of even its biggest sites to offer "the whole store and more", with a wider range of bulky items such as cubby houses that are impractical to stock in physical stores.
Earlier this month, Big W found out just how much was expected of internet retailers when its servers ground to a halt under the weight of shoppers trying to buy in its annual toy sale -- a problem also experienced at Wesfarmers-owned rival Target.
"We thought we'd get twice the level of traffic as last year; we planned capacity for three times, but we got four," Ms Coates said.
Customers complained of being unable to complete transactions or access the online lay-buy system -- a popular choice for parents wanting to lock in discounted prices for Christmas presents.
While Target remained out of commission for several days, Big W was up and running again in a matter of hours -- however, Ms Coates said it was an important lesson in customer service.
"We keep improving. You have to provide the customer with what they want," she said, adding that meant giving them multiple options about how they got it.
Big W has also nailed its colours to the mast on price, with a smartphone app that allows shoppers to scan barcodes at any retailer to check how much they would pay at Big W -- and then buy it. "You only do that if you're confident about your prices," Ms Coates said. "We are absolutely the lowest priced in the market."
The strategy appears to be paying off, with 10 per cent of online sales coming via the app.
"We want to make sure we get our share of the categories that are moving online, and at the same time it means we can free up space in-store for new categories, including services," she said.
One of these is a technology help desk, which will set up customer's iPads and other gadgets so they can use them immediately -- a similar service to that provided by Woolworths stablemate Dick Smith Electronics, which is up for sale after years of underperformance. New merchandise lines are also being rolled out, such as a range of activewear from television fitness guru Michelle Bridges that is set to appear in stores from next month and another from former ironman Guy Leech.
However, the focus on sales doesn't mean Ms Coates has forgotten about costs. She is increasing levels of direct sourcing to cut costs associated with wholesalers and ensure the company can keep up with currency-driven deflation pressures without sacrificing margins. Supply chain costs also have been reduced with the opening of a new $65m distribution centre in Sydney.
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