News of the Carphone Warehouse and Dixons merger comes as little surprise since the two have been in talks for months, but it will leave many wondering what the implications are for consumers.
Now that many consumer products are becoming connected – think of the newly launched Vanhawks Valour smart bike, which connects with a smartphone app and brings GPS directly to the handle bars – this merger will no doubt open up opportunities to offer consumers a seamless experience for the age of ‘the internet of things’.
Being the first retail and commerce merger of this size, the new Dixons Carphone company is poised to help consumers begin their journey into this new connected future.
It has positioned its outlets as ahead of the curve and the ‘go to’ place for products and connectivity services. This will give them an advantage over other brands, which will take some time to catch up.
In order to keep this position in the market, the company must aim to deliver an improved digital to in-store experience. For example, by optimising its retail networks, it will have the opportunity to create an outstanding click-and-collect offer in all 3,000 stores. It will be interesting to see how Dixons Carphone weaves digital through the customer journey to engage with the customers to whom it is selling this ‘connected world’.
Peter Veash, chief executive, The BIO Agency
Avoiding the price trap
Supermarkets should steer clear of falling into the trap of continually lowering prices or they face becoming as commoditised as the brands they sell.
British consumers look for value from supermarket brands beyond just price. For example, our research shows that 44 per cent of customers choose supermarkets that help them achieve a balanced lifestyle or offer them financial services, something which budget brand supermarkets do not provide.
Cut throat price wars will not create customer loyalty in the long run; supermarkets must develop a brand identity which consumers trust, coupled with reasonable prices, if they’re going to encourage customers to shop with them.
Natalie Cummins, head of FMCG Republic (ZenithOptimedia)
Tesco is a ‘deal curator’
Price-cutting is a problem not just for brands but supermarkets looking to avoid over-commoditisation through slashed prices. Supermarkets must now differentiate and appeal to specific customer motivators through the right mix of products at the right price.
Tesco has always aimed to offer everyone everything and as a result is seeing sales fall. Supermarkets must consider need states of different groups, choosing who to target and building a tailored experience. For example, if consumers want value they might choose Aldi. And as M&S proves, curating higher-quality products may attract groups demanding a premium experience.
Tesco’s introduction of pound zones reflects such thinking, organising a range of products that cater to customers looking for value, negating a treasure-hunt to find the best deals across multiple categories. Like Tesco, retailers must differentiate to offer a clear proposition, making the shopping experience easier by curating products against a clear set of values.
Sarah Todd, UK chief executive, Geometry Global