Aggressive Dick Smith ‘10% Online Sales’ By 2014
Dick Smith has an online mission.
Online sales are currently sitting at 4% (including ‘click n collect), but the ambitious retailer wants to grow sales to 10% when all 400 stores are opened by 2014. It currently has 323 stores.
That’s according to Dick Smith CEO Nick Abboud, as he unveiled the new flagship Sydney Central Store in Westfield yesterday.
IT, stock issues are among the reasons why web sales are currently not higher. DS has dropped Blue Martini, which was Woolworth’s online platform, and moved to Magento ecommerce system, which will help it fulfill its online dream of 10% sales.
The ecomm platform, which is built on open source technology, offers shipping, fulfillment applications and back end integration, is eBay owned – “not a bad owner to have” says Abboud.
Dick Smith web store with Magento system been live only a few weeks now but the retailer’s new boss says he is “excited” about move to fulfilling stores out of a group of locations (it was previously fulfilling stock out of Chullora, NSW).
This new ecommerce system looks set to be the key to doubling to web sales to 10%.
“We now have stores across Australia with the new platform and as we roll out every store fulfilment, Magento allows us to do that.”
“As we move to every store fulfilling, there’s not that ‘out of stock’ issue,” referring to “the opportunity” the retailer will have.
“If I’ve got 75 stores in Qld with that, today if you’re online and that sku is out of stock in Chullora (NSW) or the one store in Qld ..it doesn’t convert.” But if 75 stores had that stock “then it does convert,” he says.
Magento’s “strength is they have a box package that you can bolt on every time you want to advance your online system.”
“A lot of online players are shipping out of one location..to ship a TV from here to Kalgoorlie will cost me $300.. I don’t make $300 on a TV,” Abboud noted.
The ambitious retailer also plans to have 10,000 product skus for its online store.
It is interesting to note DS two most profitable stores are in Kalgoorlie, WA and Cairns, Qld, both regional locations.
But DS has other tricks up its sleeve to grow its web sales and counter the fierce competition it is facing from online players, both locally and from overseas sites like Amazon.
To lure consumers it is introducing lower spec accessories including the Tandy brand, which will have slightly reduced packaging cost , “obviously specs may not be of the same grade but we’ll be able to compete with online dual players,” says Abboud.
|“Am I going to make a lot of money about it? Probably not, but it does bring people to our website” and then there may be a an Apple computer or tablet they want to buy.
On the hot issue of parallel importing, he also said he is “working with suppliers to manoeuvre through that.” Dick Smiths new boss pledged to “knuckle down” on parallel importers in the future “the the help of our vendors.”
“We’re seeing dual players doing it, not just in electronics,” sector, he said.
The retailer also has developed an ‘innovative omni-channel strategy’ enabling customers to shop in a variety of ways; in store, online, via click and collect, or from their phone with the soon-to-be-released Dick Smith app.
It is also looking to make the CE retail more profitable, spending “millions” on marketing, has restructured its marketing campaign and doing is six million catalogue drops to consumers.
“No one is doing that,” says Abboud.