Friday, 2 November 2012

Comet's poor choices.





I thought they had made it. Two bailouts on from the big tip over they looked to have enough cash. But, the usual problem of a recession. Too many competitors and two few customers. And the all new online shop killer. 

I think they made their biggest mistake back in 2003/4. I was mildly involved with Powerhouse in the early millennium. Remember them? no? Never mind. At a strategy meeting they were analysing their strengths, which were few, and their weaknesses, which were many. Same as above plus, in the days when white goods retailers were heavily into PC and printer sales, they had a poor PC brand. Time Computing. And they lost that later too.

At the meeting the consultants pushed for reducing product lines, focusing on plugging the big gaps in their line up. They had no playstations or consoles. Or video games. I don't even think they had mobiles. One perceptive consultant even suggested they stock the ipod which was then just taking off.
Instead the directors decided on doing what directors always decide is the answer because all the focus groups say it is.

"More customer service."

Directors love this because they imagine some PowerPoint, some awaydays and some one on one role play and sales will rise 10%. Its cheap and simple. And of course, its nonsense. Customers always put good service in the top 3. But it isn't, its top 5 at best. Price will trump all but the worst service. Quality and convenience will trump poor service. Only outright rudeness and incompetence will turn people from the door.

Everyone does customer service. No firm actively sends its customers away or tries to annoy them on purpose. Some treat their visitors better than others. John Lewis is exceptional. Primark is certainly not.
But the exceptional John Lewis service will not make the Primark punters shop there. They are in Primark for price and choice and convenience. And that's it. 

I remember the press release from the first restructuring at Comet. They decided to do customer service as an answer to the internet. The reasoning was that people will look on line, but can't work out how a TV functions or how a video camera handles or feels from pictures. So they will come in and the staff's product knowledge will be so superior people will buy the goods there and then.
It seemed very optimistic even back then, before the internet shopper revolution had even really got started. 

What actually happened was their rivals, Curry/Dixon PC World spent their money on an easy to use, easy navigate updating realtime website. Currys, despite some very close calls, just made it through and now their website , which I personally only rate only as OK, is a go to destination. 
Comet wasted time on expensive over staffing and lengthy training and neglected what it should have been doing. Making its stores a front for its own e-commece operations. Its local units its local delivery from and pick up at stops.

And the advent of Apple intuitive design led manufacturers to make easy to use, plug and play, simple to operate products. It was no longer necessary to call an engineer to fix up a video. A DVD player is just a plug, lead and scart. Tvs set themselves up with autotune. And even items like 3D TV that rely on visuals in the store don't necessarily translate into sales. Look in store and then buy elsewhere.

Price.
Choice
Convenience.

All the 'good morning madam. Are you having a superior shopping experience today?' won't alter that.

27 comments:

Anonymous said...

All good points, none of which are much consolation to the staff of Comet.
I do and can feel for them - management has much to answer for but having said that - no business can take anything, particularly their customers for granted and Comet did just that.

Graeme said...

the last time IU went to Comet, I failed to attract the attention of any member of staff. I saw a nice screen, went home and bought online.

The problem was that the staff did not see the "sell" moment. i walked in and looked and, instantly nsomeone was asking me if I needed advice....I was more polite than usual. But when i had looked and assessed, then i wanted assistance and none was forthcoming.

Richard Elliot said...

A bit selfish, but I'm hoping they have a fire sale of the stock so I can pick up some cheap Christmas presents....

CityUnslicker said...

very smart points re customer service BQ. Management always love the idea that there is some panacea beyond dealing with lower prices when they operate in commodity markets.

If you think customer service is important and love that stuff you need to go work for a 6 star hotel.

Weekend Yachtsman said...

"No firm actively sends its customers away or tries to annoy them on purpose"

Except Ryanair of course.

And even they keep getting people back through the door - which kind of proves your point.

Anonymous said...

The only time customer service has been an issue for me, is B&Q.

They set up self checkouts, but sell items with non conformity weights (so someone had to authorise each of the 5 items per scan).

Now multiply that by 4 checkouts, a line of customers and 1 guy walking between the 4 checkout to authorise each item someone scans through.

And even then I will shop there if I "have" to as it's across the road (but they have lost sales).

Roger said...

Ask not for whom the bell tolls.....

Any business going down is bad news especially when new startups are thin on the ground. I visited PC World a while back and I don't hold out much hope for them either. Maybe old Hezza will breath some life into HMG, tho the thought of the Bufton Tuftons galvanising business is er a bit grim.

Seems to me we are like some stately home owner who has neglected the fabric for years and now gets the bill for dry rot, leaky roof and duff electrics all at once.

Nick Drew said...

I am always interested by Branson's view: pick the right staff and customer service & everything else take care of themselves

really?

Bill Quango MP said...

Anon 12:47. The media, even the government are still fixated on metal bashing and digging stuff out of the ground.
When Ford suggested its transit plant might shut, 500 jobs were put at risk.
Comet is going to take 12 times that number if it closes. Plus all the ancillary and contract people. Probably 8,000 jobs if it was to go without any buyer.

Graeme; Same experience.And Currys is usually next door so its little effort to walk a bit further along the retail park.
I actually much preferred Comet over Currys for their staff awareness and knowledge. But never enough to instill a brand loyalty.

Richard Elliott.
very selfish! Those poor workers out on their ear, having to tell their families this might be the last Christmas..
However, all of us secretly thought the same.
The final Comet nail, like Game, like Peacocks and JJB and many more was the loss of the insured goods status.
So many of the suppliers will be taking their stock back right now, regardless of administration.
Deloittes like to do 10% offers on white/black goods.

currys mightmake a pitch for the stores themselves. And possibly just the stock.

If the administrator puts all that inventory onto a decent sale ticket - 10-20%, just before Christmas, Currys is dead.

Dixon group may make a deal to take a big chunk of the electrical out of circulation and put it into their own sales in January.
If they can get a deal on the stock, its a smart move.

CU : Yep. it was so common we used to have a 'customer; the key success' folder on the laptop. just change the logos for different clients and a new Page 1 and summary.

Weekend Yachtsman. Quite so. Fun O'Air has been alleged to have contempt for its passengers. but here at CU towers, we have only the kindest words for the litigious people's airline.

Anon:1206.
BQ is a horror. Many of the Powerhouse people went to B+Q who periodically come up with great innovations and disaster ideas. They pioneered the older people into work, which sort of works for them.
Then, as you say, they have one of the worst self serve systems there is.
God knows what they must lose. A 'relative' wheeled a BBQ out only paying for a bag of screws. Chap renovated his second home that way.

Roger. Brilliant. Like it.
Walk down the high street to see the decay spreading.
Someone asked us here, way back when peston was guru in 2007, what is a recession like? these youngsters from the Major/Blair era having never experienced one.

i told the tale of a wastebin in a market town that was broken in 1981 and not repaired until almost 2001.
For those used to living in the Blair era where every broken bus shelter was reglazed and every cerb repaired and a raised paving stone treated with the same attention as a terrorist threat, the recession will come as a shock.

"hello? Surreysex County council..A fence has come down on the footpath..2

"So?"

"So? What are you going to do?"

"We'll have a look in..lets see...2023 when the new budget kicks in. I'd suggest you either nail it back up or take it all down. Bye!"

As for PC world. I used to like going there. I went the other day for a look and didn't see anything at all.

andrew said...

Basically, my sofa is a nicer place than a shop- any shop and is open when I am there.
I dont have to drive to it.
I dont have to talk to people who know less about the product than me.

The only problem with online is that it is not delivered when I click 'Buy'.
Having said that, have a look at the next ads that say if I order by 9pm, I get it the next day.

Most (non-food) shops are doomed unless you go there for a reason other than immediate purchase and exit.

So, I agree, PC world may well thrive online, but the shops will go.
On the other hand Waterstones may make it

Bill Quango MP said...

Nick Drew: Leahy says the same in his book. Customers first. Listen to what they want, and that's all there is to it. John Lewis says the same.

Yet Lidl doesn't even give its customers a display shelf to look at the goods. Just a warehouse pallet. TK Maxx will only ever tell customers 'its all on display' because it is.
No service at all. Harrods have a full day 'folding' module in their customer assistant manual. Every type of garment. If you bought a top in Sports Direct you'd be lucky if it wasn't hanging half out the bag

Its horses for courses.

What Beardie really means is give people what you know they are about to want, or what they already have at a better price. Or if you can't, Charge them a lot more but make it exclusive.

Nick Drew said...

BQ, I realise I under-punctuated my sentence & it ended up ambiguous

wot Branson says is, the only thing that matters is choosing the right staff

and then everything else - including customer service - takes care of itself

and I was querying this

Bill Quango MP said...

I think that's much closer to the truth. Pick good people and they do a good job. To get the good people he offers decent salary and plenty of perks.
I managed the megastore right next to the virgin megastore on Tottenham court.
We had numerous shared doors and passages and security. Their manager was on about 1/3 again of my salary. Plus a far far better bonus scheme.
And he knew his onions too. I was quite jealous , even though I was running our own firm's flagship store and was the most senior manager with my own mini fiefdom, choice of working hours, flexitime and a load of special privileges rarely found in retail, the Virgin guy was responsible for more.

In my firm that level of trust would not have been found.

Budgie said...

Budgie's Law: when a consensus finally emerges it is usually wrong.

Hutber's Law: Improvement means deterioration.

The consensus here is: high street fail, online good. No, online is over-hyped. It may be here to stay, but so is the high street.

dearieme said...

"two few customers": then they'd no chance.

temp exile in KL said...

Bill,

Peacocks may have folded in the UK, but they have reinvented themselves and are doing quite well in some of the most prestigious malls in Kuala Lumpur. Prices and goods quite acceptable too to most folks here.

Just saying...

Hospitable Scots Bachelor said...

Face it, there's just too few people chasing too much stuff. Don't think this is even recession based, just a natural whinnowing out - hard as that is for the people who lose their jobs.

Elby the Beserk said...

Comet make Argos seem like Harrods.

Jan said...

We still have Peacocks and Clinton Cards here in Chippenham ??

Anonymous said...

What I have always not understand about such shops, if you look at all the TVs switched on and notice the picture, very often the pictures on the TVs have not even been set up properly and every on different, it only takes a short while to set them up for the best picture that the TV can generate, it is the picture that generates the sale, no one wants to see an insipid picture.

Bill Quango MP said...

Budgie. High street has been in decline for 30 years. I remember the 1995 survey when ot of town was growing faster than high street for the first time.

High street will survive but may take a long longtime to transform. Government has all but given up. Councils are determined to squeeze every penny out of them now, even if it means much less in the future.

The rent/rates on a Bluewater fashion unit are £1,000 sqft

the rent/rates on ASOS warehouse are about £40 sqft.

ASOS warehouse is selling far far more stock than any Bluewater single unit.

As long as it costs 4 - 5 times more to operate in the high street start ups are going to be onine.
my online only friends cannot be persuaded to take even one shop in the high street even though they can pick them up for next to zero on rent free deals.

Where they are off radar in a converted barn on a farm there is no Health and safety - public liability - cafeteria - parking restrictions - service charges - roadworks - and on and on.

The person I am thinking of sells 200,000 pieces of fashion stock a year just on Ebay and Amazon and their websites. There are 3 of them.
Why would they ever bother with the High street whilst they can earn circa 200k pa virtually from home, without ever having to see the public?

Dearime - I refuse to accept grammar errors as a real issue. Its just snobbery.
However as this was a spelling error, I acknowledge your correction.

temp exile in KL
Peacocks had almost as many overseas shops as it did in the UK.
They are all over the middle east. I saw one in Italy a few months ago.
Not bad clothing at a not bad price in the UK.
Are they any good out there on the other side of the world?

Anonymous Hospitable Scots Bachelor
That is true. Retail overheating went on far longer even than house bubble. 1st discount stores then convenience stores. then coffee shops. Then phone shops. Then betting shops. Tattoo shops. Nail bars. Tanning now its 99p shops

That is what might save it in the short term. the next big thing.

Elby. Quite so. Argos next we believe. Here's a question. Why are Argos doing so poorly? They started the new century with all of the advantages.

Jan : Hmm two possible reasons.

Firstly. Peacokcs was sold to EWM {the Scots wool people} so they are still trading in about a 1/3 of their old units.
Clintons was bouht of pre-pack by a US card company. It was the Bithday's part of the group that closed for good.

Secondly - Chippenham operates on a decade long time lapse and its really only 1992 there. Which is nice. You've got the Spice Girls to look forward too in a couple of years time.

Bill Quango MP said...

Anonymous: That is a fantastic point. Often one set is flickering away and another is too fuzy to bear. I imagine it was to do with the satellite and tv ariel configurations. But you are quite right. If selling TVs is your game then get it set up right.

Sister Quango ran her own in car audio firm and it was top top end.
Sleb city the place was. Golfers and footballers and F1 drivers and such. The audio room where any old bod could try out the systems was set up exactly right. Cement mounted speakers. Gold wires ..you name it, it was in. Presentation priority..

Anonymous said...

PC World - bet the shares rose. Last man standing.

Actually PCW are pretty good on pricing these days. Got a load of stuff there last Christmas - portable HD, ipod, two Squeezeboxes - at Amazon prices.

Shame about Comet though. Back in the early/mid 70s it was the only place to go for affordable hi-fi.

All the students made the pilgrimage (only a few stores then) to put together their PL12D turntables, NAD amps and Wharfedale speakers (when they were made in Yorkshire).

Laban

Electro-Kevin said...

Also your shop needs to come top in searches when anyone searches for an item online.

Jan said...

Just seen your comments on Chippenham BQ (how rude!)....I'm inclined to agree about the time lag but it does have the advantage of being in the middle of the M4 corridor so I'm in the middle of 2 of my sons in Cardiff and London.

We're also I maintain a contender for the fat capital of the UK and for the most rubbish including fag ends in the streets. Shame as there are some great buildings and a lot of history.

rwendland said...

Comet firesale discount (10% to 30%) internal list has been published by a twitter user. Just broad headings, but the interesting 30% ones seem to be:

* "Hard storage" - USB disks?
* Digital TV Recorders & "Free to view boxes"
* Air conditioners & fans
* "B/I compact appliances" - built-in or bought-in?
* "INT" large kitchen appliances - built-in ones?

Will have to take a look (not online).

Doesn't sound like they expect a buyer for Comet.

http://www.mirror.co.uk/news/uk-news/comet-firesale-washing-machines-cookers-1424711

Agence communication said...

interesting to read that really "" At the meeting the consultants pushed for reducing product lines, focusing on plugging the big gaps in their line up. They had no playstations or consoles. Or video games. I don't even think they had mobiles. One perceptive consultant even suggested they stock the ipod which was then just taking off.
Instead the directors decided on doing what directors always decide is the answer because all the focus groups say it is.
""