When Dixons Retail and Carphone Warehouse first announced plans to merge, industry workers and consumers had quite a lot to say on the matter.
Many took to Twitter to post their thoughts, which ranged from pondering if the new union could be a threat to Amazon, to looking forward to questioning how it plans to go big on the Internet of Things (IoT).
PCR asked industry members for their reactions to the news. Some believed that the merger was a sign that both companies were perhaps ‘not providing the right support’.
One stated: “Modern day retailers are becoming jacks of all trades and masters of none.”
Another commented that the deal’s supposed focus on offering a ‘new retailer for the digital age’ was nothing more than a “futuristic sheen” to cover up “a simple and relatively boring cost-cutting exercise”.
Now that the deal has been done and Dixons Carphone has opened its first stores, we can take a closer look at how the new retailer plans to fit into the industry.
At the official launch of Dixons Carphone in August, deputy CEO Andrew Harrison gave PCR a little insight into the retailer’s plans for expansion.
“We are keen to pick up those people who don’t want to drive 20 to 30 minutes to go and pick up a smaller device. We’ll eventually be five minutes from most people’s home or office,” said Harrison.
Seven stores opened up on August 7th, and the retailer plans to open a further 30 by Christmas.
During the opening of its Oxford Street store, Dixons Carphone CEO Sebastian James outlined three things he believes will be ‘utterly critical’ for the retailer over the next few years.
“Firstly, we must keep our underlying business doing a fantastic job and trading well. Secondly, we need to deliver the synergies that we promise and find out what we can do to streamline and make ourselves more efficient. And hirdly, we must – and will – build a fantastic services business. Not just for consumers but also for other businesses around the world,” said James.
With this enthusiastic pitch and the company’s plans to rapidly expand its locations, coupled with the fact that Dixons Carphone aims to focus heavily on IoT, home automation and wearable technology, one wouldn’t blame other, longstanding High Street tech retailers for worrying about how this new venture will affect them.
Surprisingly, Nick Morrill, managing partner at Maplin owner Rutland Partners, told PCR that the retailer is unfazed by the competition Dixons Carphone may bring.
“The evidence seems to indicate that if Maplin opens a new store in close proximity to Currys/PC World – and I guess it would be the same with Dixons Carphone – there is no discernible shift in sales patterns of Currys/PC World whenever we’ve opened close to them.”
The same cannot be said for other tech retailers. One in particular is already experiencing the influence of these new stores.
Allegedly, Phones 4U will close its Currys concessions by May 2015, due to them being replaced by Dixons Carphone ones.
160 concessions are believed to be closing, with Phones 4U planning to open new stores in similar locations.
While the smartphone retailer is feeling the effect of the merger, the IoT and wearable tech markets are yet to have a big-name retailer, leaving the field wide open for Dixons Carphone.
At the moment IoT is still an emerging market, but a forecast by Cisco suggests IoT will generate £16.94 billion in the UK, so it will be very interesting to see the competition heat up.
James added: “We have a seamless and completely integrated execution of all the connected technology that we think is going to radically transform our lives in the next three to five years.
“We are the only retailer in our market that can truly make that offer.”