The pandemic boom in consumer electronics continues for Dixons Carphone, which saw revenues for the year grow to £4.9bn, with profits swinging up to £33m from a record lost of £140m the previous year. The growth is squarely attributable to the retailer bringing the in-store experience online, say analysts.
Online sales for electricals surged 103%, topping £4.7bn internationally, driven by consumers investing heavily in tech to help home working and fill lockdown leisure time.
Dixons’ total revenue lifted 2% in like-for-like growth, offset by the impact of high street store closures and the mothballing of its mobile phone business, the group said. The retailer’s electrical division grew 14%, despite key markets like the UK, Ireland, Norway, Denmark and Greece being hit by store closures throughout Covid-19 lockdowns.
“A bunch of these trends are here to stay,” CEO Alex Baldock said in a conference call this morning, citing how hybrid working will have changed the market more permanently. A standout in the electricals market was the “explosion of gaming”, Baldock added, which pushed computing tech sales to grow 25% year-on-year.
According to Baldock, the gaming market is now bigger than both music and movies combined.
Part of the retailer’s success has also laid in it embracing tech to help bring the in-store experience out to the raft of online shoppers seeking to purchase electricals and tech.
James Andrews, Personal Finance Expert at money.co.uk, explains: “The secret to its success has been its ability to successfully market products online to rival that of in-store shopping. The online push - which includes the ShopLive service connecting potential customers with real-life store staff for demonstrations and more - started before the virus hit, seeing the high street chain already one step ahead of many rivals.”
Andrews continues: “Thanks to Dixons Carphone’s strong online offering, the retailer has managed to keep profitable despite the closure of its stores around the UK. Over the past year, digital sales have grown by triple digit figures, backing up the sentiment that a smooth online buying process is imperative to its 2021 success.”
The future also looks bright for the retailer. This week it also secured an exclusive deal with Vodafone to its mobile phone plans across its 300 stores. This is a strong signal to customers and investors, following EE and O2’s decision to sever its contracts after being hit by financial penalties for not reaching sales targets.
Andrews says: “To maintain their strong position in the tech space, Dixons Carphone will need to prove its sales acumen to Vodafone to regain its lost reputation.”
But he warns: “The only factor threatening Dixons Carphone’s bounceback once stores can open to full capacity and pre-pandemic levels will depend on customer interest. After a year of consumers spending on tech - particularly home devices during lockdown, it is questionable whether consumers will still invest so highly in tech once the world returns to some sense of normality.”
Jonathan Allan, CMO of tech company Puzzel, adds: “The pandemic has forced organisations to think of new and improved ways to deliver remote customer services and there has been a clear acceleration in the deployment of technologies such as chat functions, video calling and screen sharing within contact centres to improve the customer – and employee – experience. The efforts of Dixon Carphone to effectively set up for remote support and implement alternative touch points such as live chat and real-time video services has driven real success during an unprecedented period of challenges for retail, and is something that many others can learn from."