By Claire Reilly
Following news yesterday that JB Hi-Fi has expanded into the appliance category under a new “JB Hi-Fi Home” concept store format, questions have been raised as to what the new stores will look like and how the retailer will find the balance between its traditional core categories of CE and IT, and the new product ranges.
While JB Hi-Fi CEO Terry Smart initially said the arrival of appliances in JB’s larger “homemaker centre” stores could be accommodated with some careful remerchandising, he did concede that some SKUs may go to make way for new products.
“We’ve thought long and hard and have played around with how we could actually merchandise a store more effectively to enable us to maintain the full JB Hi-Fi offering that we see today,” he said. "With the addition of the appliances category into stores, it does put pressure on storage and that’s something that we need to be working on.
“However, we’re confident that that can all fit within a traditional homemaker centre type JB Hi-Fi store. But we’ll be going for more condensed merchandising in those stores.”
This condensed merchandising will include moves towards “skinnier more productive space utilisation on the floor” and the trialling of “small footprint racking systems” to make greater use of space. But when questioned by Current.com.au as to whether large products such as refrigerators and washing machines could be accommodated by nifty rearranging, Smart discussed other changes that may need to be made.
“Some categories may reduce, they potentially would have been categories that would have reduced anyway,” he said. “But believe it or not, it’s not going to be the software that needs to reduce. It may be TV to a small degree, it may be a bit of audio reduces a little bit. But what we can do is go for more vertical merchandising as well.”
While the move towards appliances will see JB expand from its heritage in audio and hi-fi products, Smart said it was not a sign that the consumer electronics category was struggling.
“I think too much has been read into that side of it,” he said. “I mean we’ve still got a very strong business, we’re gaining a lot of share across the consumer electronics space, new stores are opening and we’re still very successful. This is a case of us as a retailer constantly looking to improve.
“This is a $4 billion category that we have an opportunity to participate in and we should look at how we can participate in that category. We’ve got a strong business, but why not make it stronger?”
Smart insisted that JB Hi-Fi Home stores would stock “all the major brands” and offer a “full suite” of products to consumers. This offering will be continued on the retailer’s transactional appliance microsite, which will launch as an offshoot of JB's current website “within the next week”.