Dixons has just announced its moving out of the High Street and is focusing only on e-retailing.
In short, they are:
1) moving into an area where it's almost impossible to differentiate (and at present only accounts for a tiny percentage of sales)
2) re-branding all existing stores and presumably reducing space devoted to personal electronics and increasing space for white goods - a Currys/Dixons mix.
This won't save the group any money as existing stores will continue to trade under the new Currys Digital name.
I have two questions:
a) Are they effectively giving up on the Dixons brand? E buyers only care about price, not reputation.
b) Can The new Dixons/Currys store format remain profitable given that no stores are closing?
In my view their best strategy would have been to stick with the 'bricks and clicks' format and possibly close smaller high street branches and focus instead on fewer large out of town outlets.
Is anyone as bewildered as I am?
I dont really see this as belwidereing for a few reasons,, ok here is my theory, I may be wrong of course.
Since the advent of the internet, and especially WEB2.0, it has become a huge potential market for any retailer, and they would be wise to base a long term business strategy on this model.
I disagree that it is almost impossible to differentiate, as I personally have saved hundreds on electronic goods buying online, sometimes from reputable eRetailers, sometimes not.
merging their name with Curry's is simply a marketing move is it not, that will possibly attract Curry's customers and also dixon's customers, therefore assuming this happens to wit they obviously do, instils a sense of value for money and quality in the consumer..perhaps?
To make an assumption that EBuyers only care about price is probably correct for 50% of eBuyers..however on a recent purchase I went for quality over price...the item was something that should last a good few years, rather than cheap Korean made goods at a fraction of the price.
I do believe that they will be profitable in the long run (perhaps they have some form of Communistic 5 year plan.. (sweet irony) ?), as if you have looked into the chain of eBuying it considerably cuts down on overheads by quite a substantial amount.
It may not be a sucess overnight, nor even within the next few years, but I do beleive this brand has enough fiscal security to survive such a move..
Like I say, I may be wrong of course..
G