Dixons has much to feel festive about. Last week, the Currys and PC World owner revealed its UK business had made a first-half profit for the first time in five years.
Dixons has much to feel festive about. Last week, the Currys and PC World owner revealed its UK business had made a first-half profit for the first time in five years. And, while nobody wants to revel in a retailer’s demise, there must have been more than one wry smile in Hemel Hempstead when rival Comet went into administration last month.
The electricals market leader has succeeded where Comet failed with its joined-up multichannel strategy. Every man and his dog tried to sell electricals online – some, such as Amazon, with great success – and store-based retailers were left wondering what to do.
But despite Comet being ahead of Dixons in online development a few years ago, it did not pursue it and the Dixons juggernaut took over. Dixons didn’t just rush to do everything online, though; it took the time to position itself differently. And with that, it unlocked the value of its stores as well as online, and focused on service.
It is a strategy that has served the retailer well, and with the demise of Comet, Dixons’ UK business will likely soak up the majority of its market share.
But with shopping habits changing rapidly, Dixons cannot be complacent. Many younger shoppers who have grown up with the internet may only ever buy certain products online, and one of those sectors could well be electricals. Yes, the internet does not necessarily offer the level of service expected by many consumers of electricals products, but the next generation of shoppers will probably be far more comfortable going online for advice. Nobody has a crystal ball, and no doubt Dixons will be planning for future changes in shopper patterns already, but the pace of change is a headache for many retailers.
Dixons also has another set of problems with its southern Europe and Pixmania businesses. It will need to attend to these businesses to stem losses, while also keeping a close eye on the UK. So although Dixons will be raising a glass of bubbly this Christmas, it will also be drawing up its next battle plan in its new year resolutions.