Dixons Carphone to focus on £5bn services market around internet of things

Dixons Carphone has targeted what it has estimated to be a £5bn opportunity to service the internet of things market, it was revealed at company’s strategy update meeting today (8 October).

“[The internet of things] is an underpinning factor of why we brought Dixons and Carphone Warehouse together at the time we did,” said John Hunter, group services director. “It is pretty much what all of our suppliers want to talk about.”

Hunter said with acquisitions, such as Google’s purchase of Nest, it had recognised there is a current “landgrab” to control sector and has identified an opportunity to be “the gateway to products” and to take advantage of the service needs of customers as their lives become more connected.

“None of our competitors have breath and reach – no one really owns the services space across end to end devices so it is an exciting platform to leverage,” he explained.

Andrew Harrison, deputy group chief executive, added that Google, Amazon and Netflix “are not going to send someone round to your home when something breaks” and that gap in the market has allowed for real differentiation for the Dixons Carphone proposition.

“We want to be the face of services in what is a pretty faceless world,” he said.

Dixons Carphone currently generates £500m from services such as repair, installation, and set-up, and controls an eight to 12 per cent of market share.

However, it has projected that services needed to power the internet of things would be worth £5bn and claimed that there was consequently a huge opportunity for market share growth.

It also planned to add products such as security, heating, lighting and wearables to its retail offering as part of this strategy.

Discussing the Phones 4u collapse, Graham Stapleton, chief executive Carphone Warehouse, said Dixons Carphone planned to revise its media spend and direct more advertising budget to social platforms – namely Facebook and Twitter - as it eyed the youth segment.

He claimed there was a "massive opportunity" for it to define its proposition within this market and overall expects to double the size of the business in the next four years.

Following the closure of Phones 4U, Stapleton revealed that it received over 1700 job applications from former employees and in the past three weeks has made 300 job offers to this group.

He said these hires have been key as the brand focuses on assisted selling.

It has begun to ramp up its services offering with the launch of a new price comparison app ahead of the Christmas trading period, which it hopes will strengthen its positioning against the likes of Amazon.

Details on the app were not given during the presentation, but staff attending were set to be given the first look at it today.

Current trading figures were not discussed, however its interim results have been scheduled to be reported on 17 December.

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