Dixons chief executive Sebastian James has declared the retailer is out of the “hospital ward” and is planning to throw down the gauntlet to Amazon next year.
James said Dixons’ first half underlying pre-tax profits of £32m, its first profit in the period for six years, has set the electricals specialist fair for 2014.
He said: “We were very much in the hospital ward. Now we are out and we are feeling better. We want to make sure we stay in that place.”
Dixons will next year step up the fight against Amazon by ramping up its online customer service and launching an app which allows shoppers to scan products in store and compare its prices against its competitors including Amazon, which it is the same price as or close to on core lines.
James said Dixons will firmly focus on what customers want rather than eye-catching initiatives. Internal research showed 60% of shoppers value Currys and PC World having the best price and 26% value delivery flexibility. Just 2% valued click-and-collect services.
James said: “We think our competitors are mainly pureplay players and think if we can better them we will crush everybody else. We are focusing on what the customer wants.
“There are some areas like online customer service where they are better than us and we are clunkier. The plan is to shape up and overtake our principal online competitors next year.”
James said Dixons has two revenue streams Amazon does not through being able to showcase through their stores exclusive new products and by selling add on items on top of shoppers’ main purchase.
He said: “We are seven to 10 times more effective than Amazon at doing that [upselling]. Online it’s simply ‘customers who bought this also bought that’. If you are in store you can see ‘would you like the fish eye lens with that?’ and we are more effective.”
Dixons today reported first half group sales increased 7.2% to £3.43bn and like-for-likes rose 6%. UK like-for-likes rose 9% as it continued to benefit from Comet’s demise.
Dixons’ like-for-likes also benefitted from the sell-off of its Italian and Turkish businesses and the imminent exit from its French Pixmania operations.
James also revealed plans to “make shopping kitchens fun” through a new pilot in Thurrock, Essex with new demonstration areas, spaced out products, new “funky” homewares products and plugged in machines.
He said: “We want to power up all of the machines so we can demonstrate how good the machines are and have a few more suds going round and round.”