The merger between Dixons and Carphone Warehouse could prove one of the most significant chapters in the journey to the connected world.
Much has been written about the recently approved Dixons Carphone merger, which lists on August 7. But none of it really grasps the true fundamentals of this move that will, over time, prove one of the most significant chapters in the journey to the connected world via the ‘internet of everything’.
Consumers need and demand choice thanks to the success of the internet. Dixons Carphone will provide much-needed choice in the volume sector as the four screens – TV, PC, tablet and mobile phones – converge.
However, John Lewis has created a strategic point of difference and set the standard for genuine customer
care and experience through its unique culture.
Dixons Carphone has to exceed that and differentiate itself if it is to Play a dominant role by building trust in the minds of consumers.
I believe together Dixons and Carphone have the tools to achieve this brand position.
Dixons has strong sourcing capabilities in PCs, tablets and TVs, plus white goods, including a vast store network. Online represents some 17% of its UK business and it is capable of much more to facilitate a true multichannel capability for the merged companies. Click-and-collect is also a great traffic driver to store, even with the backdrop of declining foot traffic of around 1% in the high street.
Carphone has fantastic partnerships with the mobile phone carrier networks in Europe, providing unbiased advice to consumers plus a successful European store network.
These strengths, coupled with in-store and back-end IT systems that track tens of thousands of tariffs in
real time daily, are unparalleled.
The technology and customer relationship management systems will enable Dixons Carphone to develop and extend this capability to other categories and Dixons’ stores to achieve a consistent multichannel experience.
Carphone will also bring to the merger its experience in the US with Best Buy. Its success with Best Buy Mobile – growing US share from around 1% to 8% in a few years – also became the benchmark internally for innovation and governance. I am sure that will provide the merged business with tools and knowhow about working with partners to accelerate growth and remove complexity.
Today’s consumer also wants a service capability 24/7, 365 days a year – not unlike having your own chief information officer who ensures advice and remedial repair response in the event of a fault for consumer electronics and electrical products. Both Dixons and Carphone have these capabilities and should consolidate them to create the market leader in Europe. That is a massive opportunity and a differentiator that no one is doing well in Europe.
One of the most important benefits of the merger is the Dixons Carphone ability to counter the impact of Amazon by offering the latest new product, underpinned by a more robust in-store approach to ‘Walk Out Working’. This means no customer leaves the store without being shown how to use the products they have bought to achieve greater satisfaction.
In conclusion, this is a unique opportunity to create a genuine customer-centric culture to benefit customers and employees. It can make technology the ‘servant of consumers’, and provide manufacturers with alternative channels of distribution to ensure rigorous competition.
- Bob Willett is chairman of several companies and former co-chief executive of Best Buy