What chance Comet and any other underfunded high street retailer?
Sadly, on November 2nd Comet slipped into administration. It was probably inevitable, even though it was only purchased by private equity firm OpCapita last year for £2. I guess they overpaid for the 236 stores.
Maybe i’m an idealist, but I do think these stores have a place in the market and this is where I see it.
1. They are brand showrooms. They price match any price anywhere on the Internet. It means they will lose out on some margin on sales to those who are price sensitive, but reward the ones who make all the effort to search for the best online price (like I do). There is no substitute for seeing the product and pressing the buttons and you just can’t get this from a photo online.
2. They then charge for delivery or installation as no Internet retailers seem to offer this.
So, is this possible?
Amazon seem to be able to match any online price pretty closely and whilst they don’t have 236 stores, they still have lots of warehouse space and staff. My suspicion is that the rent and rates on the stores are simply too high to make these spaces pay. I hope Comet survive. Not because I am a fan per-se, but because I believe in choice. I don’t want to just buy from Amazon and John Lewis, but I do want to be rewarded with a better price for my research and for making the effort to drive out to see them in their store.
PS
I just went down to Comet in Nottingham Castle Marina. The only sign of any change at all is an A4 sheet in the window. It isn’t a bad looking store really and the staff I spoke to were all friendly and helpful. The staff have said that anything can be sold at face value only, no gift cards and no discounts. It did look a little like it had been robbed as there were lots of gaps in the stock (particularly in the upstairs bit!). Expect a fire sale soon.
I don’t want to appear like a freaky TV pricing groupie, but I got an email this morning from Best Buy. The US phenomenon that was going to take our market by storm when they opened in Lakeside shoppping Centre.
Forgive me for being underwhelmed, but like the sad act I can be at times, I price checked them against my usual suspects Dixons and John Lewis. And guess what?
They’re really a worst buy. It’s £319.99 at ‘best Buy’ with a normal warranty.
Samsung LE32C450 32" LCD HD Ready TV from Best Buy
It’s far cheaper at Dixons at only £274.72
Samsung LE32C450 32" LCD HD Ready TV from Dixons
And an excellent value £296 with a not quite free five year guarantee at John Lewis.
Samsung LE32C450 32" LCD HD Ready TV from John Lewis
We are now working in an almost perfect market, where all the buyers have all the information and the lowest price wins all the business. For me that means you choose whether it is worth an extra £22 for a four year extended warranty (it clearly is here!) with John Lewis.
Best Buy? Brand values that deliver what they promise?
You judge for yourself.
Updated
Now, i’m not going to suddenly claim to be the people’s champion, but I did notice a rather large spike in my traffic to the site yesterday and, guess what? Best Buy have reduced the price of the Samsung LE32C450 32″ LCD HD Ready TV to a more reasonable £278.99. A reduction of £41 or in percentages, 12.8%. Is that the power of bloggers like us who Andrew Marr likes so little, or is it a pure coincidence. Again, you be the judge.
Blogger Power - the newly reduced Samsung LE32C450 32" LCD HD Ready TV
I wrote a piece last October about Dixons and their advertising approach that directly attacks John Lewis.
Well in the last few months, I’ve had two opportunities to test them out and judge for myself. My conclusion? Well, If I tell you I bought both times from Dixons and have been surprised and delighted by their service, then that maybe says it all.
The first time was for a TV for my son’s birthday. Dixons was just miles cheaper for a like for like product. I bought from them, thinking it was something of a risk, but it was perfect. Timed delivery, well packaged, perfect paperwork. Overall excellent.
The most recent time was only last week when our own TV blew up with no chance of repair. I looked at John Lewis and then price compared them with Dixons. Whilst the model number is not identical, the spec itself seems absolutely identical. You decide!
Samsung 37" LCD TV from Dixons at £399.99
or
or a Samsung 37" LCD TV from John Lewis at £499.95
So the price difference is a massive £100 or in this case, Dixons are a full 20% cheaper. Therefore, what you have to be paying for is the extra guarantee that John Lewis provide. Their claim that this five year guarantee is actually free, is nothing short of scandalous. It’s not, it’s £100.
John Lewis used to claim they would price match anyone, but they have varied the model number slightly so it’s not an exact match and they have added the spoiler of their so called ‘free’ guarantee. The price match in this case would not, by their rules, be a valid one and they would refuse to price match. They would back this up by saying they wouldn’t price match an Internet only retailer like Dixons anyway.
I guess you pays your money and you takes your choice. I chose the rather more honest approach of Dixons. Twice.
Updated
Karen in Customer services has responded twice to my comments which does at least show they have a bit of a system. As you can see below, both comments are almost identical so i’m not being palmed off with a total cut and paste job.
John Lewis price match details - from Karen in Customer Services
if you can’t read this, i’ll put it in full here:
Hi John
I just thought it might be helpful if I explained our position further.
We reviewed our Never Knowingly Undersold terms and conditions on 6 September 2010 to include the matching of on-line competitors something we hadn’t done up until then. We match those competitors who trade in the same way as us in that they have a high street presence. As Dixons trade solely on line we do not match their prices.
The two models that you highlight are different. Dixons also sell the LE37C580 which they have priced at £438.95. We use the model numbers our suppliers give us and I would like to reassure you that we wouldn’t deliberately alter them to duck out of having to price match.
We always try to offer exceptional value on our TVs – on this product we’re at the same price as our key high street competitors most of whom only offer a 1-year guarantee. Therefore we would consider that our 5 year guarantee comes at no extra cost to our customers. If this additional guarantee is particularly important to a customer they would find that these key competitors would charge up to 33% more than our selling price to offer the TV with the same service conditions.
Having said that I understand it is completely your decision to choose where you make your purchase but I do hope that my explanation of our arrangements is of some help
Kind regards Karen Eardley Customer Service Manager John Lewis Head Office
Updated again
When I get it wrong, i’m happy to admit it. And in this case I got it wrong. The specs of the two TV’s I used as a comparison are not the same. The John Lewis one has an HD Freeview Tuner and the Dixons one has a normal NOT HD Freeview Tuner. As you’ll see from the comment below by Ricardo, the specs can’t be compared and as such, neither can the prices.
Oops, I got it wrong, thanks Ricardo. HD Freeview is not the same as NOT HD Freeview
But luckily, steaming to my rescue is Karen from John Lewis Customer Services (who Ricardo doesn’t work for). She points out that Dixons do carry EXACTLY THE SAME LE37C580 TV at £438.95 and they won’t price match that either. It’s out of stock though so it’s either selling like hot cakes or an old model.
LE37C580 TV with HD Freeview at £438.95 from Dixons
Okay, so my maths isn’t quite as dramatic. It is not 20% cheaper buying from Dixons, it’s 12.2% or exactly £61.
That to me sounds like a saving. John Lewis won’t price match Dixons, but you have to take the decision as to whether you think the £61 is worth it for the extra warranty.
This is some very brave advertising by Dixons and you can see the copywriter has had great fun in constructing it. Its beautifully written, there’s no doubt about that, but is it good for the long term health of the Dixons brand?
For me, ever since Dixons profits showed that they made more money selling warranties that we didn’t need than they did from the products themselves, they showed their true colours as sales charlatans. Their brad values were short term opportunistic profits. They became the brand that people loved to hate. John Lewis, with their sensible people offering sensible prices in sensible locations became the choice of sensible people and they filed that void left behind by the Dixons customers who deserted them. They became a better than viable alternative.
But just recently, I’ve started falling out of love with John Lewis. I don’t believe their people are that nice. I don’t actually believe they are never knowingly undersold as I can always find cheaper (they don’t want or allow you to compare their prices with online prices you see!) and I began to doubt the value of their brand promise when I (over)heard people being knocked back when they were trying to return things a few days out of warranty.
So after I’ve walked through the hallowed halls of John Lewis, played with their docking stations, left funny messages on the screens of their laptops, logged them into things they shouldn’t be and and had their sensible staff come along and offer to help me, will I go to Dixons last?
No. Actually I won’t. I’ll go home and buy it online from Amazon, or another online retailer where I know where I stand, I know where and when it will be delivered and where I know that, at the moment at least, I’m a valued customer.
Good try Dixons, but I still think you’re too shady to get my custom in the near future. Keep this up though and I’ll certainly come back into store to look.
Updated
Another brilliant written and crafted ad from Dixons. I’m starting to think they actually deserve some success in what they are doing as they have captured most of our thoughts and more importantly, our actions, pretty damn well.
Another brave ad from Dixons capturing the spirit of what we're actually doing!
Johnny Lyle's new brand thinking 