Leading UK homewares retailer Dunelm has reported that digital sales accounted for a substantial 37% of its total sales in the first quarter of its 2025 fiscal year – a significant jump which not only highlights Dunelm's successful adaptation to the digital age, but also reflects the shift towards ecommerce across industries, writes Brendan James.
How Dunelm increased digital sales
Dunelm's latest financial report has shown its growing success in the digital realm, with online sales growing by +2% to reach a staggering 37% of total sales. This growth is particularly impressive given that the business already had a strong track record of digital sales from the previous year, as more and more consumers begin to favour online shopping. The company's total sales for the quarter reached £403m, marking a healthy +3.5% increase YoY (see related).
The rise of Dunelm's digital sales is down to several factors. The company has placed extra investment into improving the online shopping experience for its customers, including implementing a new AI-based search function in collaboration with Google Cloud. This has helped improve the search functionality on Dunelm's website, making it easier for customers to find and purchase products. Additionally, Dunelm has improved its click-and-collect service, with over half of its product range now available for in-store collection. These improvements have made shopping online with Dunelm significantly more convenient, leading to an increase in digital sales.
How digitalisation is impacting industries
Dunelm's digital success is not a unique story in this day and age, but part of a larger trend that has seen digital software transform businesses. In recent years, there has been a significant increase in 'online-only' services across multiple sectors, which is changing how businesses operate and interact with customers.
One example of this trend can be seen in the property sector, with companies like Sold revolutionising the real estate market by offering a fully online home-selling service that can provide customers with a free cash offer within minutes. Another example of a successful online-only company is ASOS, a fashion and cosmetics retailer that reported £3.54b in revenue in 2023.
The importance of digital adaptation
If you are a business owner, Dunelm's digital success should be a powerful reminder of the importance of embracing ecommerce. In today's age, having a strong digital presence is no longer an optional extra, but essential for company's survival and growth. Keep in mind that modern customers expect seamless online shopping experiences, and companies which are unable to provide this may lose a valuable competitive edge.
It’s important to remember that although Dunelm has seen strong digital sales growth, it has continued to invest in its physical stores. This may be because it anticipates that the future of retail is not necessarily digital-only, but digital-first. As a business owner, you should strongly consider preparing for a future where customers prioritise using digital stores but still value the convenience of being able to walk into a shop and see products in person.
Overall, Dunelm's digital sales performance is a clear sign that ecommerce is here to stay. If you own a business, then there are valuable lessons to learn from Dunelm's success, particularly when it comes to investing in digital technology and improving the online shopping experience.
