Dick Smith Joins Forces With David Jones

Dick Smith is teaming up with upmarket retailer David Jones to open a network of "stores within stores" around the country. Could this alliance be good news for consumers or are prices only going to get higher? Talk of a "high-end customer base" doesn't bode well...

Earlier in the month, we attended a Dick Smith media briefing where the company pledged to renew its focus on tech enthusiasts and premium, high-end branding. Today, the retailer revealed yet another business gamble, with 30 Dick Smith "store-in-stores" set to pop up in select David Jones stores around Australia.

From 1st October, you'll begin to see “David Jones Electronics Powered by Dick Smith” sections inside select David Jones outlets. All existing David Jones electronics staff will be retained in the new branding move. From a consumer perspective, the chief difference will be a larger range of products at David Jones, including Amazon Kindle devices and mobile phones.

"The Retail Brand Management Agreement (RBMA) entered into with David Jones is the next step in establishing ourselves as a major player in the market and directly links back to our business strategy to be the leading consumer electronics retailer in Australia and New Zealand," Dick Smith CEO Nick Abboud said.

"It’s a win-win for both companies. Dick Smith is expanding its network and reaching a wider, high-end customer base, while David Jones is increasing its product and services offering for its customers. It also strengthens Dick Smith’s buying power, which in turn allows for more competitive prices for customers across both stores."

With consumers more frugal and bargain-hungry than ever, we're not sure it makes sense to partner with one of Australia's priciest retailers, but we suppose it does tie in with Dick Smith's decision to focus on the premium side of the market.

What you think of Dick Smith's latest business alliance? Share your thoughts in the comments section below.


Comments

    The beginning of the end for both of them... DJs couldn't make Sony Style and Apple interior stores work so I can't see having a second-rate electronics supplier like Dick Smith being able to work.

      When I worked for them, the Apple part of their electronics did fantastically... its everything else they have massive trouble with.
      To be honest, I think this is a really good move on DJ's part; not so sure about Dick Smith's (but I guess it can't make things worse?)
      DJ's traditionally have *no* idea how to run an electronics store specifically because they try to run it exactly the same as they run their clothes and makeup counters (etc).

      DJ's is already a "premium" sort of store; the type of people who shop there are your upper class people with not a lot of sense (when it comes to electronics), that and the type of people who *want* to pay more to appear higher class than they really are (the Kath & Kim type of Australians). That's exactly the sort of market Dick Smith have been trying to get in more recently by the looks of things...

      Of course this is all pretty useless to the average reader of lifehacker, but I think it'll probably do well for DJ's (or at least less badly).

        I guess what I'm saying if they truly are the "premium" seller then Sony Style and Apple would be the best positioned brands for that market. And I based my assessment of their Apple performance with the downgrading they did in the Elizabeth Street store.

        Dick Smith is not a premium brand for electronics. The quality of their merchandise over the last 10 years has been appalling. I can't see any reason to shop at Dick Smith at all.

        We'll see but my view would be two underperformers teaming up just means double the underperformance.

          I think despite what they might hope; when I see them as premium, I think "high prices" rather than actual quality good. I think they're going after the premium customer, not the premium product per say...

          My knowledge of their Apple performance is pretty old now; on Bourke St Mall, the Electronics dept used to be well placed (well, in the basement, but easily accessible).. now its 3rd floor of the mens building and gets significantly less traffic... that can't have helped.

          I still think this is a "good" move for DJ's; though it will be interesting to see how their standard customer base reacts given that I don't think Dick Smiths has quite a "classy" enough name for the average DJ's customer.

    I can't see this being good news for consumers. Better relations between retailers usually means more implicit collusion / price fixing regardless of what the ACCC has to say about it.

    The whole 'store in a store' model as a whole is also awfully anti-consumer.

    The brand representatives are there to push various accessories and other items you didn't want that the brand has to offer, even if all you wanted was something simple like say to buy a shirt.

    Even though an agnostic store rep might have been able to recommend you a brand which provides say a better fit, you know that a specific brand rep will never give you this advice. They're only selling one and it 'fits perfectly' and 'looks great'.

    Meanwhile if you want to actually compare everything yourself, you'll be doing the floor circuit and checking in what each brand has to offer while expectedly being hassled by the rep each time with their single minded sales tactics.

    Last edited 12/08/13 2:46 pm

      So long as you know the rules, I don't really mind the store in store model from time to time. It does mean that I can go to a few stores without the need of going from one end of the centre to the other.

      The negative side is that it rarely happens that two sis's will have the same products so you can't then compare prices.

      Dick Smith will still have stand alone stores. They're not closing down

    Two sub-par retailers teaming up to offer products priced 30% more than they should be. Under-staffed by people who seem clueless about the products they're selling. In a store that's constantly pestering their customers with the upsell and offering little to none after sales support outside of what they're legally obligated to offer.

    I avoid David Jones and Dick Smith whenever possible and I'll continue to do so. Even if consumers aren't already doing the majority of their purchases online there are many other, much better alternatives for both of these retail chains.

    Does Dick Smith still sell the Kindle> Thought that they lost that right, when Woolworths sold them.

    Store-in-store shops rarely work. Virgin music inside Myer was a huge failure.

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