By Claire Reilly
When JB Hi-Fi issued a trading update last week to announce that it expects yearly profits to be weaker than first forecast, there was some good news amongst the grim figures – the company saw a 76 per cent increase in online sales for the three months to the end of March 2012.
Australia’s big retailers certainly recognise the importance on online retail to their businesses, whether as a rising threat or as a cohesive part of their omni-channel or multichannel strategies. And one company that has successfully integrated e-commerce into its larger retail roadmap is Dick Smith.
Current.com.au spoke exclusively to Dick Smith’s national operations manager, Armando Pedruco, to talk about the company’s online strategy and how Dick Smith is capitalising on the opportunities available online.
“Obviously the biggest focus for most retailers at the moment is how to get the online business,” said Pedruco. “Our online model is actually a very good one. We won the Online Retailer of the year [in 2011] and I think we’ve probably got the best website – it’s easy to use, customers can go in there and find information really easily.
“We don’t over-promote on the website, so it’s actually a nice flowing site where people can research and really find out a full range of computers and TVs that we have.
“But we also have a tactical strategy online – we do one hour deals and daily deals, and those things are doing really well. Some of them work fantastically well, some of them don’t work so well and we’re learning as we go through what the consumer is looking for from that point of view.
“We’ve invested heavily in the online space. I think it’s really important to understand who your customers are, where they’re coming from and then really market towards them from an online point of view."
But while Pedruco said the online business was strong, he noted that bricks and mortar still forms an important part of Dick Smith’s operations.
“In our business, a lot of people do their research online and use our website to find information. But customers are still coming into Dick Smith because I think people still want to talk to our staff. They want to be able to go through the range of the computers that we have and find out which one is best for them. They don’t necessarily get that on the internet just yet.
“The people who know what they’re after are the internet purchasers. They know it, they can check the price and as long as that all fits, they’ll purchase the product. But a lot of our customers are first-time computer users – they still want to be able to talk about the product and understand what’s best for them.”
While many consumers want to walk into a store to make their purchase, it’s no secret that Dick Smith will close up to 100 of its shopfronts across Australia in the coming months. While Pedruco conceded that this was caused in part by the poor performance of some stores, it was also part of the company’s strategy for the future.
“We’re closing a few stores and that’s purely on the basis of what the future might look like for retail, particularly for Dick Smith,” he said. “Having over 430 stores and a really good online business is probably not going to marry together very well. So the fact is we are condensing our stores, but putting a lot more time and effort into our online."