Back in June I thought Dick Smith was a Dead Brand Walking, given the cruel suffering and ineptitude that is a visit to one of their stores, but since then I’ve had a number of opportunities to eat my words. The Business press is crammed with Hero worship for the genius of Anchorage Capital, the Private Equity firm and majority owner of the once iconic retail brand, also for Nick Abboud, the no-doubt brilliant retail CEO.
But I’m not convinced that the PE miracle is anything more than a slick PR mirage engineered to rake in a massive return for Anchorage Capital on the back of their very own ABM (this Alan Bond Moment came at the expense of Woolworths’ Shareholders).
Cut through the awesome David Jones deal, and the fashion tech store concept Move, and you’re left with the same old same old at the vast majority of Dick Smith stores, maligned staff all too few in number servicing a similarly slight customer base. Even if Dick Smith managed to look just like JB HiFi, which it won’t, it still won’t BE JB HiFi and it will lose all the same.
It’s said that growing a business means doing what you do so well that the Market DEMANDS that you get bigger, you get bigger only by being better. Doing deals and launching concept stores helps to create a perception of doing better, but the P&L is geared around the 300+ unprofitable stores that look just like they did when Woollies owned them, setting out a blueprint for a rocky ride on the ASX if they can get it there.
No, I suspect the miracle turnaround begins and ends when Anchorage offloads its investment in Dick Smith in record time to Retail Investors through a listing, or to the management team beforehand, and for as much as 20x the $20m they paid Woollies!
Maybe Anchorage’s ABM is more of a GGM for the Dick Smith team?
Consumers have changed in the past 5 years, now they do more than consume, they create too.
Facebook, Pinterest, Twitter, Foursquare and others have trained their Billion users combined in the art of publishing. The pursuit of Comments, Likes and Shares are at the heart of Consumer Publishing, and getting those Likes can sometimes be more important than being truthful.
When it comes to feedback, trying to write a sharable review is at odds with the needs of the business being reviewed. Constructive feedback is great for the business owner, but isn’t all that sharable. Controversial, sensational, emotional, hateful and provocative are better. Combine this with an unhealthy disregard for issues of liable, with Online Ratings and Reviews sites perceived to be a Safe Harbour for the reviewer, and your business can suffer very badly indeed, with little or no recourse.
Yabbit provides a channel for consumers to give feedback that is both discrete and constructive, giving the Business Owner the chance to follow up and diffuse any issues before they become public. By promoting Yabbit you encourage your customers to channel their feedback to you in a constructive way, saving your business from expensive long term brand damage.
Today’s customers are more sophisticated than ever, sampling the wares of more brands in more locations than ever before, happy to journey to a café in the suburb next to the next suburb for a cold drip, encouraged to buy from overseas by far flung Friends’ waxings on Facebook and keenly eyeing the swings in their local currency for macroeconomic bargains. This Neo Consumer is older and richer than before too, more thoughtful, more discerning and always ready to Switch.
The Neo Consumer is empowered, in control and they know it.
Informed and empowered Neo Consumers are hard to impress too. Battling for their business is harder than ever, and the dangling of ever-oranger carrots has become an increasingly important part of the game. 3 Hour delivery, 100 day free returns, free international shipping, and super slick omnichannel blah blah have apparently become the battleground. But too much emphasis is lumped on the need to differentiate from the competition with whistles and bells at the expense of profit, and worse still, at the expense of consistent, good service that’s required to keep the hard-to-win Neo Consumer coming back.
With that empowerment also comes a willingness to walk away at the slightest hint their expectation won’t be met. And for the Neo Consumer, switching to a new provedore is easy come easy go. No warnings and no second chances, one slip, and they’re gone.