Page 4: Meeting the demands of the customer
In an industry which is fast-changing, organisations need to know their customers and their changing needs and requirements. The biggest threat for any organisation is to fail to adjust to changes in the market-place. In an increasingly complex retail environment it also became clear that not all customer requirements and purchasing habits were the same!
As a retail organisation, Dixons needed to understand their potential customers and any likely developments in their buying patterns. By developing a clear direction which responded to these changes using this acquisitive strategy, Dixons could further develop its market not just through the nature of the products and services it provided but also through the improved distribution opportunities it created.
A strategic decision was taken to focus upon individual brand building which would then position the chains in relation to each other. This would involve emphasising the benefits of each chain of stores to meet the needs of the customer, by product and competitive attributes. The belief was that this strategy could be used to create a broad range of retail opportunities, each of which would serve different customer requirements. Service would underpin each of the retail brands’ strategies.
The policy led to Currys moving away from the High Street to larger edge of town superstore units in order to satisfy customer needs such as a wider product range, emphasis upon bulkier and larger goods, improved space for browsing and car parking. In contrast, the strategy for Dixons was to remain in the High Street where it would provide a more portable range of goods. Space made available by reductions in the large screen televisions and domestic audio ranges was then used by Dixons to create a much wider selection of photographic and portable audio products and computer software, in which Dixons has been rapidly developing its market share.
Across many ranges the products in both Dixons and Currys were identical. It was important that prices were the same in each store as many customers visit both. For many customers shopping at Dixons tends to take place during working hours with visits being made to Currys superstore units at weekends and in the evenings.
The objective for PC World was to provide an outlet which would develop the sales of PCs to consumers. The strategy was, therefore, to combine Dixons retail skills with PC World’s product authority to stimulate additional consumer interest in the market. Until the launch of multi-media PCs, the market was viewed as specialist. The opportunity to use sound, colour and movement through the use of CD-ROM exploded the multi-media market and helped to move PCs into the mass market.
Whenever we go shopping, different stores or different ways of retailing have alternative meanings for us. For example, we might prefer to shop in one supermarket rather than another. We are thus influenced, for a number of complex reasons, by different retail propositions. Strategies used by Dixons to develop different customer propositions were designed to help the Group’s products and approaches to retailing to appeal to different groups of customers. These positioning propositions were broadly related to customer, product and competitive attributes.