New Dixons boss Seb James marked his 100th day in the job last week and today, presenting the retailer’s full-year results for the first time, outlined his strategic priorities.
James is of course a longstanding Dixons director and played a pivotal role in ensuring the delivery of his predecessor John Browett’s renewal and transformation plan. Now he is taking things to the next stage.
Central to James’s vision is to maintain and enhance Dixons’ multichannel strengths. He is convinced that, despite the rise of pureplay rivals, a stores business has big advantages.
Dixons’ estimates put the electricals market share of ‘single-channel’ retailers’ - Amazon et al - at about 12%. That compares to 62% for the specialists, and Dixons speaks for 19%.
The strength of the online players is price. To combat that appeal, Dixons has been bringing down prices. The differential between Dixons and pureplays, notes Investec analyst David Jeary, has been brought down by 15 percentage points from 22% to 7% and the intention is to narrow the gap further.
To do that, Dixons has focused – and will continue to – on cutting costs. That has not been at the expense of crucial factors such as service standards – an increasingly important part of Dixons’ appeal – but instead there has been a shift to branded Currys and PC World stores, enabling the closure of stores where each fascia had a presence.
The flipside of efficiencies is improvements made to Dixons’ stores in recent years, which mean that the appeal of shops is an increasing draw for consumers.
The improved stores enable Dixons to effectively showcase new technology. That’s important for suppliers, who love what’s being done and are keen to be partners, and Dixons has put service and explanation of product benefits at the heart of its offer – qualities that online competitors cannot replicate.
It’s an approach that has worked well to date - Dixons’ full-year profits came in at the top end of expectations - and which James intends to push further. While Dixons faces a tough trading conditions, the foundations on which to build look strong.