Dixons survives Amazon’s incursion
LONDON: As Amazon.com Inc moves deeper into the grocery and fashion industries, the companies in its cross hairs could look to the UK for a lesson in how to handle an incursion from the Seattle-based giant.
Dixons Carphone Plc, Britain’s largest consumer-electronics retailer, has thrived in an area where Amazon’s presence is long established. Selling an array of products from mobile phones to dishwashers, the company has boosted its market share by first matching Amazon on price across almost all categories, then redesigning stores to lure shoppers and sell them supplementary services.
“In a sense we’re lucky because we were one of the first sectors to catch the Amazon virus,” CEO Seb James said at a press conference. “Many died and we survived, and we think we’re now somewhat inoculated.”
For retailers, the fear of Amazon has never been stronger. The online giant’s move into bricks-and-mortar retailing with the US$13.7bil acquisition of Whole Foods Market Inc wiped US$17bil off the value of Wal-Mart Stores Inc in a single day.
The introduction of Prime Wardrobe the following week, a service which lets custom- ers try on items at home before they buy them, spooked investors in companies from Macy’s Inc to Zalando SE.
In the case of Dixons Carphone, trying to keep up with Amazon has been an everyday business since the company was formed in a 2014 merger, a deal that was partly a response to the growing threat of the online giant. As rivals such as the Comet chain have perished, Dixons Carphone has built an unblemished record of domestic sales growth.
“Amazon have seen off the runts of the litter, but it’s not easy for them now as those that are left are formidable competitors,” said Bryan Roberts, an analyst at TCC Global.
Dixons Carphone has a dedicated team that monitors more than 100,000 competitor prices and with Amazon making changes frequently, members run checks several times a day.
Store employees are equipped with tablets to show how prices stack up against rivals to help convince shoppers that buying online isn’t cheaper. Customers are shown that products such as £659 (US$856) Sonos wireless soundbars and £139 Beats by Dr Dre wireless earphones can’t be bought elsewhere for less.