Dixons Carphone’s CMO on what it takes to succeed following a merger

Mergers often cause more difficulties than synergies, but Dixons Carphone is swiftly growing profitability and its new group CMO Gary Booker is confident its disruptive approach to marketing will set it up for long-term success.

Whether it is Microsoft’s failed takeover of Nokia, resulting in the business writing off $7.6bn (£5.4bn) last year, or RBS’s widely-panned ABN AMRO acquisition in 2007, which led to the bank being bailed out by taxpayers, the business world is littered with high-profile examples of doomed merger and acquisition deals.

However, Dixons Carphone, which includes the Currys, PC World and Carphone Warehouse brands, has defied the odds since it began trading in August 2014.

The joint business reported a 21% jump in profits to £381m in its first annual results for the year to 2 May 2015, and this growth has not receded. Over the crucial 2015 Christmas period, the brand saw like-for-like sales rise 5% as it predicted profits of up to £450m in 2016 – higher than city forecasts of £440m.

Gary Booker took over as group CMO on 1 February, having previously been CMO for the Dixons Retail brands, including Currys and PC World. He worked alongside Julien Diment who headed up marketing for Carphone Warehouse, but Booker now oversees the entire group’s marketing function after the two divisions were merged.

Avoiding internal wrangling

“Usually what happens in mergers is companies get worried about who is doing what and it is a power struggle. That makes you miss your numbers. You take your eye off the customer and become too focused on internal matters,” says Booker, who joined the business two years ago.

“We’ve only been merged for 18 months and while most would still be figuring out where the head office should be or arguing over internal structures, we have already moved and merged our head offices, and have worked through function by function at real pace.”

In order to maintain the integrity of each brand under the Dixons Carphone umbrella, Booker continues to talk about Currys, PC World and Carphone Warehouse as separate brands, which he believes is crucial to their future successes.

“Just because we are one merged business doesn’t mean that we are going to be commoditised in the way we talk to customers,” he says. “We make sure that what we put in front of customers is very different, clear and compelling. We are not in the habit of [recycling advertising].”

Dixons Carphone Group CMO Gary Booker

Dixons Carphone’s ‘hidden gem’ brands

The first campaign under Booker’s newly expanded remit is an ad featuring funny man Keith Lemon talking up Carphone Warehouse’s upgrades programmeBooker says this light-hearted approach – much like the Currys PC World 2015 Christmas campaign featuring Hollywood actor Jeff Goldblum – is reflective of its long-term strategy.

“If we take a more disruptive, comedic approach to marketing around big moments like Christmas, we know we will get more standout. The John Lewis weepie approach isn’t for us and is perhaps showing fatigue,” he explains. “Rewind a year or two and Currys PC World would never have been part of the conversation at Christmas, but our Jeff Goldblum ads [last] year put our brand front and centre alongside the likes of John Lewis. It was amazing to see. The ‘We Start With You’ slogan really reflects the difference we can make to our customers’ lives and that is important.”

Moving forward, Booker says the business will aim to communicate the breadth of its branded offer in clearer ways.

He acknowledges, for example, that most consumers are not necessarily aware of the company’s repair service brands such as Geek Squad or Knowhow and this is something the Dixons Carphone group plans to address through its storytelling.

“We carry out 1.5 million product repairs a year and we repair 8,000 laptops a week. You could buy your laptop at Amazon and we will still fix it for you. We really see future growth coming from this services infrastructure – it is our hidden gem,” he claims.

“There is a growth opportunity to make the public more aware of what we offer. The services part of our business massively under-indexes at the moment.”

New store format

Dixons Carphone announced in January that it would close 134 stores, as it aims to champion its ‘three-in-one’ store concept featuring a Carphone Warehouse, Currys and PC World under one roof. The move is not expected to result in any job losses.

Booker says the business eventually wants to reduce its 1,200-store estate to 1,000 stores. The long-term approach will be to convert all of its out-of-town sites into the new concept – so far, 270 stores have been converted.

Dixons Carphone is reformatting its estate to include three brands under one roof

He explains: “If you look at Staples Corner [retail park] in London, on the same estate we have a Currys, a PC World and a Carphone Warehouse [in separate buildings] – it’s bonkers. The ‘three-in-one’ concept will not only make the brands more compelling and easier to access for customers, but it also means we are paying less on rent. It is common sense.”

This changing approach to stores is also creating business opportunities in the US. Former Carphone Warehouse CMO Diment, who launched the brand’s iD 4G mobile network during his tenure, has moved on to work in Dixons Carphone’s Connected World Services division where he will oversee the roll-out of its US store partnership with Sprint.

Dixons Carphone ran an initial trial last year, which saw it manage 15 Sprint stores across Miami. Booker says the results were so “immediate and stark” that it accelerated the initiative and now manages over 500 Sprint stores across the country. “The Sprint tie-up is an example that the same infrastructure that drives success in the UK can be partnered with others and fuel success overseas,” he observes.

The ROI challenge

Over the next 12 months, Booker says there will be continued focus – industry-wide – on linking marketing spend to return on investment.

He explains: “Attribution, in a world of more complicated customer journeys, is hugely important. You now need to balance presence and spend over different channels, and consider what the return on investment is from being present. You can spend a lot on social media campaigns but how important is that in the context of the overall journey? You cannot be on a social channel just for the sake of it – it has to drive people into the store.”

As a marketer, Booker’s career has been quite diverse, switching from agency side to marketing roles at telecoms company O2, as well as video game brand EA. He says that, ultimately, his approach is all about challenging himself and taking on roles that are not ready-made success stories.

He is confident that Dixons Carphone will continue to grow, so long as it does not take its eye off the ball around bigger competitors such as Amazon.

Booker concludes: “We must be cheap and quick, as Amazon can continuously invest in price and delivery, but if we have the same price, service and delivery as them, I’m confident our store proposition and repairs element can give us the edge.

“When I eventually move on and look back, I want to feel I have made a difference and have created a better connection with customers.


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