DSGi was supposed to run for the hills with Best Buy’s UK arrival, but its Currys store shows the fight is just beginning
Flashy Americans have long been the stuff of irritation if you happen to be a Brit, and never more so than when they seek to show you how much better they are than you. This particular cliché may have flashed through the minds of those seated in the DSGi boardroom at Hemel Hempstead when news broke that US electricals leviathan Best Buy was set to open in the UK and that its first port of call would be Thurrock in Essex.
Now the nightmare has become reality and it is three weeks since the car park outside Best Buy was full and marshals were controlling the numbers flooding into the newly opened store.
All very galling you might think, if you are DSGi. Yet in spite of the obvious attractions of the new arrival, situated not much more than 300 metres from DSGi’s PC World and Currys stores, the outcome seems to be positive - this magazine noted that in the weekend following the opening of Best Buy, the Currys store enjoyed record-breaking sales.
This may have been down to the white van that was trawling its way around the various car parks close to Best Buy advertising a ‘Price Crash’ at Currys, or perhaps shoppers preferred to go with the tried and trusted.
Whatever the case, it does seem curious that both Best Buy and Currys appear to have had very robust trading since the moment the former welcomed its first UK customers.
The question therefore, is how do you cater for a new arrival and deal with the perceived commercial threat and, equally, do two massive electricals retailers within spitting distance of each other equate to more shoppers shopping more often?
For Best Buy the facts have already been well recorded. Back in the US, it is what is normally termed a category killer, but then so is Currys in this country. This is, in fact, the largest Currys branch in the UK and the largest electricals store in the UK. And if you choose to float between the two stores, as presumably their respective managements do, then it is probable, with a few exceptions, that there won’t be much difference in the prices of the individual items that are on sale.
How therefore, to differentiate and what is going to give your store the edge over the nearby opposition?
Devil in the detail
Currys has been open since late November 2009 and it has the distinct advantage of having taken possession of a building with upscale architectural features, thanks to the fact that the previous tenant was the ill-fated Ilva, the Scandinavian furniture retailer that failed to make an impact in the UK.
And DSGi has opted to keep the Chinese basalt frontage and the stainless steel staircases in place, as well as the strange circular holes in the ceiling on the first floor. All of which means that while the Thurrock Currys is a retail shed, it is not as brutal in intent as its new neighbour.
However, this would hardly be sufficient to persuade big-ticket electricals shoppers to part with their cash, although they might prefer wandering around Currys to Best Buy on an aesthetic level.
The deciding factors are more likely to be width of choice, price and, perhaps, just perhaps, the way in which the merchandise is displayed. In spite of the obvious external difference between the two stores, once inside, the manner in which an initial approach to a specific department is made is likely to be very similar.
Both stores have very long empty avenues. These allow sight lines more or less to the back and both stores use overhead signage to guide shoppers through the space. In the case of Currys this means TV monitors and 3D cardboard signs, while in Best Buy, white suspended circular rafts are used to demarcate particular areas.
And although there is a considerable difference in size between the two stores, Best Buy is about 45,000 sq ft while Currys measures 70,000 sq ft - the larger store has two floors meaning that both ground floors are similar in size.
However, it is at this point the differences begin to become apparent. DSGi spokesman Mark Webb is quick to point out that Best Buy is, broadly, a technical offer (for which read TVs and computers), while Currys is considerably more expansive.
Walk around the two stores and you begin to understand what he means. The first floor in the Currys store is about white goods and what used to be known as brown goods - vacuum cleaners, toasters and suchlike. The ground floor is used for cameras, TVs, computers and entertainment. Stuart Aislabie, the duty manager for the store, seems keen to promote the width of the offer in Currys: “If you want to be buy a black American-style fridge freezer, in any of our stores there’d be one or two. In this store, there are 15.”
At this point, standing on the first floor, as on the floor below, it is not only choice that marks out this store, but the sheer quantity of branded point of sale. Webb says that there are more than 100 branded “supplier” areas in the store. Practically, this means that on the first floor in particular, the impression is gained that there are more shop-in-shops than unbranded commodity-based offers.
There are also the kind of fripperies that can be undertaken in a very large space, so there is an area for professional ovens, toasters and other kinds of electrical mass catering essentials. Whether there is a demand for this in a destination such as Thurrock is a moot point, but there is no denying it is an interesting addition to what you might find in a normal Currys. And on the ground floor, it is worth noting the Apple and Bose shop-in-shops, the latter being the second in Europe - the other is in Munich.
Finally, it would be hard to leave the Currys store without clocking the TV wall at the back of the ground floor. There are more than 170 of them on display and it is a feature that Currys has made its own ever since it opened its first megastore at Junction 9 of the M6 in 2008.
When a comparison is made with Best Buy on the electricals front, Best Buy holds up well, although its TV display is not quite as large as Currys’. Best Buy has also put an electric car and several bicycles with electric motors to the right of its entrance.
Like Currys’ professional catering equipment, it is quite hard to see where the demand from this may come from, but in terms of differentiating itself from its competitor, this is a good shout from Best Buy.
The only point that you might be inclined to make is why did Best Buy bother with brown goods? Here Currys wins hands down in terms of selection and space devoted to the category. It does actually look like something of an afterthought and given that Currys will automatically price-match anything that Best Buy does, it is width of offer, ultimately, that will count.
On balance therefore, Currys and DSGi may have much to be thankful about. The figures look good for both Best Buy and DSGi, although there is a sense that some of the initial Best Buy turnover may have been bought, given the preponderance of 32-inch Toshiba special offer TVs that were available on opening day.
Signs across the front of the Currys store announce, as they did on the day that Best Buy opened, ‘Price Crash’. Allowing for the reasonable trading statement that DSGi put out last week, there must be sighs of relief and quiet satisfaction in Hemel Hempstead that Thurrock will remain a prime trading destination after all.
Size 70,000 sq ft
Number of floors Two
Product range White and brown goods, and electricals
Previous tenant Ilva
Best buy, Thurrock
Size 45,000 sq ft
Number of floors One
Product range Predominantly electricals, with white and brown goods