ANALYSIS Jessops goes into administration
This week Jessops called in the administrators, since when its website has stopped taking ecommerce orders. The news comes at a time when the market for Jessops’ core camera and related photographic products is declining. People, it seems, are using their smartphone cameras to take photographs instead of buying dedicated cameras, while at the same time, as administrators from PricewaterhouseCoopers (PWC) put it, there is “reducing confidence in UK retail”.
Jessops had been concentrating in recent months on reimagining its stores and the way it did business in a multichannel age. It had opened new Centres of Excellence at sites including London, Edinburgh and Birmingham showcasing the practical hands-on help that its staff could give, hoping to compete with its customer service against online convenience and potentially lower prices.
At the time of its Edinburgh store opening, Trevor Moore, then Jessops UK chief executive, outlined the thinking. Speaking to PMA, he described the shop as “the next level of interactivity,” adding: “Not only can customers touch and feel the cameras, we can now demonstrate the key new features and compare performance.
“Once customers see how dedicated we are to photography and the level of service we are providing it will give them the confidence to make that all important purchase.”
But it seems that the money ran out before such investment could bear fruit, especially in the light of declining consumer spending. It’s a similar story to that of Game. The videogames retailer had a strategy to make itself a leader in digital gaming sales, reinventing itself for a multichannel future that would include online and lcoud-based gaming. But while its sales of digital products were growing, sales for its PC and video-based games had fallen.
Neil Saunders, retail analyst at Conlumino, told The Guardian that said Jessops had struggled for a period of time against the bursting of the digital camera bubble. Despite trying to rebalance itself by offering other products and services, said Saunders, Jessops never quite managed it. “We’ve seen this pattern replicated many times before and it’s been shown to be true in music and video – especially where the product is becoming digitalised – and it is true in books to a lesser extent.”
Entrepreneur Dan Wagner, chief executive and chairman of Powa Technologies, warns that others must learn from Jessops’ experience if they are to prosper in a new age of retail. He said it was not enough ‘just’ to have a website in a world where consumers expect to communicate with retailers across seamlessly-connected channels.
He said: “They may have a look at goods in store, then check prices and availabilty online and purchase at home. Or they may compare notes with their peers on social networking sites while travelling home from work and order on their mobiles for either delivery at home or pick-up in store.
“As well as a rethink, this requires the infrastructure to back it up, which will enable the optimisation of the customer experience, ensuring that whichever channel the customer uses, his previous history of purchases, searches and preferences will be recognised and he will receive a personalised experience giving him the best offering for him in his particular circumstances.”
PwC, appointed on January 9, said that while Jessops, which turned over £236m in 2012 and sold from 192 shops and online, was well-known and respected in its market, its market had declined.
Rob Hunt, joint administrator and partner at PwC, said: “Our most pressing task is to review the Company’s financial position and hold discussions with its principal stakeholders to see if the business can be preserved. Trading in the stores is hoped to continue today but is critically dependent on these ongoing discussions. However, in the current economic climate it is inevitable that there will be store closures.”
Jessops employs 2,000 people in the UK.
Its move into administration follows retailers including, as well as Game, JJB Sports, Peacocks, Barratts, and most recently Comet.