If you can't beat 'em, run in the opposite direction -- this appears to be Dick Smith's response to cheap online shopping, with the company pledging to renew its focus on premium, high-end brands for tech enthusiasts who have fatter wallets. So are these the end times for brick-and-mortar retailers? Or is ol' Dick actually onto something?
Last night, Dick Smith Electronics held a media briefing at its new flagship Sydney store where freshly-minted CEO Nick Abboud outlined the company's strategy moving forward. For those who aren't aware, Dick Smith recently changed hands and is now owned by private investor firm Anchorage Capital Partners and Mangement.
"Retail is simple but it sometimes gets over complicated with management," Abboud explained to attendees. "So we're trying to really simplify the electronics category [by] working hard with vendors to be more profitable as an organisation. We're going to be very strategic about who our partners will be."
With an eye on serious tech hobbyists, the new-look Dick Smith is promising to offer the best gadgets money can buy in the key areas of computing, mobility and "fashionable" accessories. Best-selling brands such as Samsung, Apple and Sony will have their own branded sections manned by specialist staff in many stores.
“We’re going to stay very focused on what’s important to our core customer and we’ll continue to target them with our famous categories,” Abboud said.
The company is also expanding its footprint: around 40 new stores are currently in the works which will chiefly appear in "high traffic" areas like shopping food courts. Presumably, the idea here is to capitalise on passers-by, although we feel it's worth noting that these people tend to be impulse buyers and window shoppers -- not exactly the type of consumer that Dick Smith claims to be courting.
We asked Abboud about this and he said that a large accessories range would be a prime driver to get people inside stores; particularly cartridges and batteries which are basically the Dick Smith equivalent to JB HiFi's DVDs and BluRays.
These days, you can't have a retail strategy without an online component -- thankfully, Dick Smith is looking to strengthen its omni-channel with an improved "click-and-collect" system that should help to ensure customers don't leave the store empty-handed.
"If you live in Kalgoorlie or Cairns, we've got stores in those locations so we don't have to freight from a central location like a lot of other retailers. We will also be able to deliver within the same day to that customer."
In a reluctant concession to bargain-hunters, Dick Smith will continue to stock cheaper brands including Tandy -- but this will not be a primarily focus, with Abboud admitting the company "probably won't make much money from it".
"...But if we can get a customer [into the store], they might be tempted towards better invested areas, such as an Apple Macbook," Abboud ruminated.
Personally, we think this concentrated focus is a good move on Dick Smith's part -- at least on paper. In the end, it will mainly come down to staff knowledge/training and how affordable the prices are. Let us know what you think of the new Dick Smith in the comments section below.