Business Model

Bringing life to technology

Our customers are at the centre of an increasingly digitised world which they can access and utilise in numerous different ways. Whether this be social media, online gaming, downloading movies, sharing pictures, cloud computing or energy efficient products, customers do not just come into our stores to buy products, but to find a solution to a need. It is our job to help find the right solution for our customers, ensuring they get the most out of the products they buy. As such we put our customers at the heart of everything we do. Our core purpose of bringing life to technology embodies our belief that in this increasingly complex world our customers need solutions and help. From this core purpose we have built our customer plan which is discussed in more detail by clicking here.

As one of Europe’s leading specialist electrical retailing and services companies we operate a business model that supports delivery of our Customer Plan.

Customer insight

In order to ensure we understand what our customers want, how they use the products they buy from us, and what they think of the service they get from us, we use extensive customer insight. This includes discussions at customer panels, interviews, home visits and other research. This is supported by mystery shopping in our own and competitors’ stores, exit surveys and customer feedback. We use this information to build our ranges, improve our stores and services as well as help us with other business decisions.

Stores and internet

Convenience and ease of navigation are key in attracting customers to shop with us. Through the Renewal and Transformation plan we are improving our stores, making them easier to shop with, for example, improved navigation, better signage, playtables to allow customers to interact with products before they buy, as well as good advice on features and benefits from our colleagues. We are also combining our PC World and Currys stores into 2-in-1 stores which give our customers greater access to our specialist computing offer combined with our market leading mixed electrical offering, and enables us to improve our sales densities and rent to space mix. We favour the combined store format and we are implementing this in our stores across the Nordics and Other International businesses.

Our FIVES sales training programme combined with our Product Learning Centres provides our colleagues with the right tools to really understand customers’ needs and to provide them with the complete solution to properly meet those needs. We will continue to improve the training of our colleagues and the ways in which we can help them be experts in the products we sell.

Many of our customers research products online before coming in to store to buy, so ease of navigation, clear descriptions of products and related information are important for our websites. We are increasingly seeing customers combining the ease of the internet with the convenience of our stores by using our reserve&collect service. In the UK, we have implemented the market leading e-merchant platform from PIXmania which enables us to continually evolve and improve our online offer to ensure customers are engaged with our internet operations.

Products

Combining our customer insight with our market strength across Europe we can make sure we have the right range of products in our stores to suit customers’ needs. Our scale means that we can work with suppliers to showcase the latest technology and products in our stores, with areas dedicated to key suppliers’ products.

This also enables us to get products exclusively in our stores, such as the iPad on launch in 2010. Own brand products enable us to offer customers a greater range and choice of products at competitive prices. We have defined a clear good-better-best brand range of: Currys and PC World essentials; Logik; Advent; Goji; and Sandstrøm brands.

After-sales services and support

Many of our customers need help with their products, whether it be delivery and installation, keeping their products up and running or repairing them when things go wrong. Our business in the UK & Ireland sets the benchmark for our services infrastructure. In May 2011 we relaunched our services under the new KNOWHOW brand with four clear pillars of support for customers to choose from.

We operate the largest network of two man deliveries in the UK with around 60,000 deliveries per week enabling us to provide customers with the convenience of next day delivery in a three hour time slot or the value of a free delivery later. Our KNOWHOW team in store, in our call centre and out in the field can provide set up and upgrade services as well as online fix and back up services. Our market leading range of help and support services help ensure a customer has the backing of expertise and support that keeps their technology up and running. In the event that a customer has a problem with their product we fix it. For example our state of the art repair facility in Newark repairs 600,000 laptops and televisions each year and is able to repair and return a laptop in six days. We offer customers a choice of support agreements such as ‘Premier’ which provides them with a loan TV, for example, if theirs needs to be taken in for repair.

Our low cost operating model drives continuous improvement in our processes and services. This continuous improvement enables us to re-invest back into providing better value products and services to our customers.

Direct ownership of the service infrastructure from end to end means we can ensure the best service at all touch points with our customers. We believe this gives us a unique operating model for a specialist electrical retailer and a significant competitive advantage in meeting the needs of our customers.

While much of the improvement work has been focused on the UK, core elements of the business model exist in our businesses in the Nordics and Other International divisions. Further services under the KNOWHOW brand will be rolled out to these divisions over the medium term.

Low cost operating model

Dixons Retail operates in a highly competitive market. In order to deliver an unbeatable customer offer we need to have a low cost to sales ratio relative to the service based business we run. This means we have to:

• have sufficient scale economics in each market – usually number one or two by market share;
• lean business processes – minimising wasteful activity;
• design our business processes end to end to minimise cost and deliver a high quality of service; and
• find new ways to continually improve what we do.

We use a technique called Lean Six Sigma to re-engineer our business processes to make them better for customers, easier for colleagues to operate and therefore cheaper to run.

Through this low cost operating model we can deliver an unbeatable offer for customers meaning that they reward us with increased market share and improved returns for our shareholders.