World Television

WORLD TELEVISION Dixons Retail Preliminary Results Presentation - 23rd June 2011 Page 2 Dixons Retail - Preliminary Results Presentation - 23rd June 2011 John Browett: Okay, shall we start then. So, welcome, thank you for coming along today, we'll do the normal format which is we're going to give a presentation to start with and then we'll open up for questions. So if we just start off. I mean obviously the markets are still relatively difficult and we want to just explain why we're able to, in this marketplace, actually maintain our profits, maintain our sales and gain share as a consequence of that where some of our competitors are struggling a bit. I think one of the things to say is that from our perspective, our focus is entirely on the customer at the moment. We're not actually looking at this from a sort of market share perspective, for us that's an output it's not an input, it's not the way in which we actually run the business day to day. And one of the things I'm going to show you today is actually some data from the UK to show you how we're making a material difference in customer satisfaction because our business always starts with the customers, that's where we're actually getting the results. As a consequence we're then able to actually outperform the market. I'd also say that the market share comments which we've made are not just the UK and Nordics, we bring that out because it's three quarters of our sales, but we're seeing the same thing in Italy, in Greece, in Turkey and a number of other markets. And the reason for that is that we've actually got a number of things which we're doing in the business which we're now rolling out across the whole of the group. And I'll show you a bit about how we think about taking those core capabilities and actually using them in different markets. The store transformation of course underpins all of that, it's the way in which we make all of those changes manifest to the Page 3 Dixons Retail - Preliminary Results Presentation - 23rd June 2011 customers and we now actually have 70 Megastores operating across Europe. Over 380 stores have been reformatted and we will just now continue to roll that programme out. The new formats still continue, we get a 20% uplift on average in the UK and just over 15% in the Nordics. It's harder to get the uplift in the Nordics because it's a really good business there but it's 15% on very, very high sales densities so therefore it's very profitable for us. And those uplifts are maintained into the second year, so for everything we're saying there's no change in the Renewal and Transformation plan. Now what are we doing going forwards. We're going to continue to press harder on delivering this very customer focused operating model and there are several areas where we believe we will get benefits as we roll out what we're doing. The store format is the one which we talk to you about in these meetings a lot, is because it's easy and it's manifest, it's easier for us to show you pictures of stores you can go and look at it. But also the work we're doing on improving the selling model in terms of doing services through the KNOW HOW launch in the UK and the subsequent work we're going to do across the rest of Europe. And then the development of our multi channel businesses - making our operating model leaner still and therefore as a consequence of that work improving the stock turn as well. I also in the opening sort of remarks wanted to point out to you that actually the technology cycle is favouring us at the moment. I know that sounds a bit odd because people are very worried about what's going on in consumer electronics. In the UK only about a third of our sales are actually consumer electronics, for most of the mass merchants they may be double that, even higher than double that number. And worse for them the changes which are coming are all in the top end of the market, it's in 3D TV, Page 4 Dixons Retail - Preliminary Results Presentation - 23rd June 2011 it's in Smart TV. So the only growth in those markets are on the products which you actually need to demonstrate and sell in store. Now I'm not asking for a market which is down as much as consumer electronics is down, I'd rather like the market to be more healthy, but there are some things which actually make our business a little bit more defensive when this economic cycle is where it is and actually a service led model, with all the technology changes. And that's why we've got some of the technology here to show you, is always advantage, you have to show people what you can do. The fact that with the new Samsung tablet you can sync it to your television and you can actually use it in another room so you don't actually have to miss your favourite programme, etc. Just to reiterate this point about satisfaction with staff. This is some data, which I actually saw only yesterday and I thought you'd be interesting in seeing it as well. And this is a real data, this is completely unedited, etc, people say oh don't we need to disguise the data and that; no, no, let's just show you raw. The work we've been doing on selling service in our stores is absolutely critical to making our place a great place you'd want to come and shop at. And what we've got here is the data which we get back from our customer interviews and it starts in period 4/5 last year where we've had a really big push on this and this shows you how much we've been able to move customer satisfaction with service over the last year and this are really difficult numbers to move in most businesses. And if you look at the end this is a comment which was pulled out there. We've got - I didn't feel pressurised to buy anything I didn't want. This of course is our reputation; it's all about commission sales forces selling extended warrantees and all that other stuff Page 5 Dixons Retail - Preliminary Results Presentation - 23rd June 2011 and you see absolutely no evidence of it now in the customer data. We don't pay commission and we don't push our sales, we use the Fives process to identify the needs for the customers. And this is part of the reason why we're actually having a better time in the marketplace because we're making real changes to the customer shopping trip and I could go through every single aspect of the business and show you the improvements we're making to the underlying operating statistics which actually drive sales in the long run. So the way in which we think about the business now is absolutely around this customer lens, in terms of everything we're doing, in fact we use customer insight to drive the whole business. When we started on the journey I think there was, I asked to say who's the guy who does market research or who are the people who do market research and we had a part time person who worked two days a week and all they did was just commission a few external research, there was very little insight in terms of actually how the shopping trip worked in the business. Whereas now everything we do is done through the lens of the customer in terms of actually the store, how the stores are designed, how we actually designed the websites, how we actually range the product, how we do our after sales service and how we do support. And so we now have a full set of measures on what the customers think about our business and actually how they want to be served and how they want our offer to come and that then gives you the offer in terms of value, choice and service. And the more work we do the more we find that the service element of what we do is the critical determinant of our success. Page 6 Dixons Retail - Preliminary Results Presentation - 23rd June 2011 And that's the big thing that comes back from the customers, again and again and again, what they say is - your prices are fine, your promotions are great and everything else, you've got good ranges, the big thing I want from you is when you come into store you will help me buy the right product and you will make sure that I've got everything I need to do it, to use that product well and then if something goes wrong you will actually look after me and I can get the deliveries, etc. It's absolutely a critical part of it. Now in order to support that offer we have to have a low cost operating model because we've got lots of people out there who are trying to be parasitic on the service which we offer.

Load more