There’s no doubt the retailer is feeling the heat. CEO John Browett’s five-point plan is dramatic enough to show he realises the firm needs to evolve.
The most controversial of these moves is the as-yet-unconfirmed number of redundancies. There will be blood, but to take no action would be suicide.
And it won’t be easy. An operation the size of DSGi is an incredibly slow moving ship compared to a one-man band independent operation.
The logistics of implementing wide range changes across all of its stores is an entirely different prospect to an independent deciding to push service and order in less stock.
However it would be wrong for those smaller retailers to make the assumption that the business is in a microcosm – that it is the leadership of DSGi that is somehow flawed.
The situation DSGi is in should be a stark warning to others. The damaging effects of the current climate are just that much more noticeable with a chain of its size.
However it’s clearly possible to be a successful ‘old school’ retail operation. If there’s one thing that distinguishes Best Buy from other PC and consumer electronic retailers it’s the commitment to service and staff training.
Indeed, apart from the sheer scale of the operation, it’s this aspect that soon-to-be rivals are probably most scared of.
It’s an example of a traditional retail model thriving despite being under the pressure of the same two-pronged attack everyone is feeling, internet retailers and supermarkets.
The speculation as to what will happen when it launches – ranging from total failure to total domination, buying up DSGi and simply wiping everyone one else out – is indicative of the uncertain nature of the market.
The credit crunch, supermarket encroachment, the Best Buy/Carphone Warehouse alliance – they are all contributing to a state of flux in the UK channel. The tectonic plates of retail are shifting and that’s when tremors happen.
A certain amount of satisfaction from seeing DSGi in trouble may be inevitable, but it is often the tallest buildings that are worst damaged. It won’t be the only one to feel the earthquake.