Dixons Carphone credits role of CRM as it returns to profitability
Dixons Carphone CEO Alex Baldock credited “exciting advances” in data and customer relationship management (CRM) with playing a part in the successful turnaround of the previously loss-making retailer.
The electrical goods company almost tripled its number of active, contactable customers over the year ending 1 May, from 3.5 million to 9.6 million. That represents an increase of 174%. The business’ total active customer base now reaches 12.5 million, a growth of 33% since 2018.
“We now have many more customers – customers we know better and can talk to more, with our exciting advances in data and CRM, and our big leap forward in contact rights last year,” Baldock said on an investor webcast today (30 June).
“We can help more customers more often and that’s more valuable to all concerned.”
The business began to transition away from being a discount-heavy retailer to having a more customer-centred CRM strategy in late 2018, hiring head of CRM Saul Lopes from Virgin Holidays to lead the charge.
Speaking at the Festival of Marketing in 2019, Lopes said discounting was “ruining” the company’s margins and suggested that if that strategy had continued, Dixons Carphone would have been out of business within five years.
It’s a sign of our confidence in our prospects that we’re investing in our brand now, and we expect it to be a further driver of growth and profitability.
Alex Baldock, Dixons Carphone
Dixons Carphone’s total group revenue rose by 2% over the financial year to £10.3bn, as like for like growth was offset by the impact of high street store closures across its mobile business. Group statutory profit before tax hit £33m, compared to a loss of £140m in 2019/20.
Online electrical sales surged by 103% to £4.7bn, as the retailer pursues its ambition to become a “truly omnichannel business”. In the UK alone online sales jumped by 114% to £3.4bn and the company grew its online market share by six percentage points.
According to Baldock, the business has been able to drive rapid online growth by delivering better “retail basics”, including a 50% bigger range in the UK, and investing in keeping prices down.
The CEO promised more to come online this year, including further range expansions and new online platforms in the UK and Nordics, to give customers a “radically” easier experience and improve upselling and cross-selling opportunities.
Dixons Carphone’s online net promoter score (NPS) did drop from 55 to 25 between May and November 2020, with the retailer challenged by the sudden shift towards online shopping and increased demand for electrical products as the Covid-19 pandemic took effect.
However, the NPS score has since recovered and is now flat on last year, while the retailer’s Trustpilot score has increased from 1.4 in 2020 to 3.4 in 2021.
Nevertheless, customers have made it clear that they still want to use both online and in-store channels, said Baldock. Dixons Carphone is therefore innovating to give customers “the best of both worlds”.
How Dixons Carphone overhauled its CRM programme
For example, the retailer is looking to trial same day delivery in the UK with taxi firm Uber. Dixons Carphone also hopes to enable customers to pick up online orders in-store within 15 minutes, down from its current promise of an hour. Order and collect made up 30% of its online sales in the UK last year, following a 113% year on year growth in its use.
Dixons Carphone is also scaling up its ShopLive service, which allows consumers to replicate face-to-face interactions with store staff online. Since launching in April 2020, ShopLive has driven a four times increase in conversion and grown average transaction value (ATV) by 55%. Baldock expects the service to be “very big” with customers in future.
Meanwhile, the business is also ramping up its in-store experience, particularly face-to-face advice from staff and tech demonstrations, and claims to have invested in 600,000 hours of training.
The company is also on the cusp of a major rebrand that will see Currys PC World and Dixons, mobile phone retailer Carphone Warehouse and service partner Team Knowhow, all brought under the Currys brand by the end of October. The one brand will make it easier for customers to see “everything we do for them” across product categories and services, Baldock explained.
“It’s also a sign of our confidence in our progress and our prospects that we’re investing in our brand now, and we expect it to be a further driver of growth and profitability,” he added.