Dixons Carphone today said it was working to improve its multichannel performance as it reported a fall in half-year sales and a pre-tax loss.
The retail group, which operates Currys PC World and Carphone Warehouse – both Top50 retailers in IRUK Top500 research – said its ongoing transformation, focused on making it easier for shoppers to buy both through multichannel retailing and services and through offering credit, was seeing customer satisfaction with the business increase.
Dixons Carphone reported sales of £4.7bn in the first half of its financial year in the half-year to October 26. That’s down by 4% on the same time last year. Sales of electricals accounted for £3.9bn of sales, and stayed flat compared to the same time last year, while sales of mobile phones came in at £830m, down by 18% on last time. At the bottom line it reported a loss of £86m after one-off costs of £110m.
Alex Baldock, Dixons Carphone group chief executive said: “We’re on track to deliver what we promised this year and with our longer "We’re on track to deliver what we promised this year, and with our longer-term transformation. In a tough UK electricals market, we’ve gained significant share, and strengthened our market leadership. Our planned investments in the colleague and customer experience have played a big part in this resilient performance, demonstrated by sharply increased customer satisfaction scores. Our big International business also registered market share gains in every territory, with solid sales and margin improvements.
“And we’ve taken important strides in our transformation. It’s easier for customers to shop how they want: we’re now gaining share online as well as in stores, where we are investing to create exciting, enticing stores.”
Dixons Carphone says online is a “big profitable growth opportunity” for it. In the first half of the year online sales grew, with internet purchases of electricals up by 11%; that includes rises of 7% in the UK and Ireland and of 19% in the Nordics.
Behind that rise lies a smartphone-first strategy and the use of machine learning. Machine learning has been used to improve digital marketing and offer product recommendations, while site speed has improved by 30% and the online range has increased. A Currys PC World smartphone app has had more than 100,000 downloads. The retailer says that early data suggests that both conversion rates and average order values are higher over the app than via the mobile web.
It has also widened its range and aims to have 40,000 SKUs (stock keeping units) available online.
In the Nordics, the retailer launched click and collect and a customer care centre chatbot, which it said has contributed to strong growth in the market.
Shops, says Dixons Carphone, must be “exciting, enticing destinations for face-to-face advice and demos”. It is remodelling its stores, with 81 completed so far and 64 to see investment in its current financial year. Changes including giving more space over to fast-growth categories such as large screen televisions, and putting slower moving products online only. In-store experience zones include 40 gaming battlegrounds, 52 TV experience zones and 72 for major domestic appliances.
“We already know that many of our customers are multichannel shoppers,” Dixons Carphone said in its half-year statement. “Online and stores need to work together to give a true multichannel experience. We’ve made a start here.” Examples include giving in-store staff store mode tablets tat they can use to show and sell the full online range. In-store online sales have risen by 35% as a result. Meanwhile, online customers can use stores to reserve and collect an item - a service that accounts for 33% of online sales. “This is only the start: we have a long way to go in order to deliver a full multichannel experience.”
The retailer also aims to make it easier for customers to buy by offering services from set up and connect to recycling goods.
But Dixons Carphone also said that the better IT needed to underpin better infrastructure was currently a “constraint” for the business but that over the course of its transformation plan it would become an enabler and then an accelerant. To date, improvements have included the introduction of store wi-fi and store mode tablets, headsets and laptops as well as pricing technology and delivery forecasting tools. It is replatforming its ERP and says it has taken more time to ensure this is right first time and within budget. The group has also appointed a new digital and IT team, in the form of Mark Allsop as chief digital officer and Andy Gamble as chief information officer. Both will join the business in January.
The retail group is focusing on credit since it says two-thirds of customers already use some kind of credit to buy technology in the UK. It says it is committed to being responsible and safe in the area, with all its 21,000 staff trained and compliant.
Image courtesy of Currys PC World