Ringing the changes has benefited Dixons Carphone

 

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The Independent Online

Outlook Talking of banks, perhaps those wanting to get on the right side of the regulatory authorities could learn a few lessons from Dixons Carphone, which wowed the City with sales figures that defied even the most optimistic of forecasts.

UK sales growth of 13 per cent, excluding the benefits derived from new store openings, would be considered a good result in almost any circumstances. Coming less than a year after a major merger, and when the consensus forecast was for 5 per cent growth, it is positively miraculous.

The departure from the scene of competitor Phones 4U didn’t hurt. Dixons Carphone is also benefiting from the “store within a store” concept, which has seen Carphone Warehouse outlets popping up in existing Curry’s and PC World shops.

But there’s more to it than that. Customers seem to be keen to visit the group’s bricks-and-mortar shops, and they are spending money in them. Perhaps we shouldn’t be all that surprised. When people plan to shell out at least £800, and possibly more than £1,000, on an ultra-high-definition TV (the company thinks these will succeed where 3D TV failed), they are often quite keen on the idea of a demo.

If the person they get that demo from is friendly, personable and knowledgeable, they will often buy there and then. They might even spend a bit more on flashier kit if the salesperson knows their onions.

Staff in outlets owned by the company during the bad old days when Dixons was struggling often seemed to perk up only when they were selling overpriced extended warranties. The retailer appeared to have fallen prey to some of the worst sins of the financial services industry, with commission-hungry staff behaving like extended warranty insurance brokers.

These days, employees make extra money from their stores doing well – a team bonus, if you like – but also through posting good customer service numbers. And good service is what you need to offer if you are going to incur the costs of operating a retail estate alongside the, by now, compulsory online offering.

With the incentives set correctly, Dixons Carphone is benefiting, grabbing chunks of market share from its online-only rivals. If more financial services businesses followed its prescription, perhaps they might start to reap similar rewards. At the very least, they wouldn’t incur the wrath of their regulators so often.

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