Dixons Carphone chiefs discuss post-merger road map and insist joint leadership will not be a ‘game of thrones’
Newly merged Dixons Carphone has set its sights on “completely transforming” how people use technology in their homes, but both sides are adamant the joint leadership will not emulate “a game of thrones”, according to its group chief executive Sebastian James.
Speaking at the FT Innovate event in London James said that so far the £3.8bn ‘merger of equals’, which completed in August, has been “more successful and easier than we dared hope”, and that it will now turn its attention to driving technological transformation in homes.
“We’ve had quite a year, in which we have brought together two strong businesses that had been through their own big transformations in the last five years – from being fundamentally product centric to being much more customer centric,” he said.
He said the idea for the merger dated back to 18 December last year when he and former chief executive of Carphone Warehouse Andrew Harrison – now deputy group chief executive at Dixons Carphone – had a drink and mulled how they might work together to radically change how they talk to customers about merging technologies.
“It’s going well but many married couples would say that in the honeymoon period, but we really are two businesses that are destined to be together…it’s rare you find a strategic rationale, people you know and like, and another business trying to achieve the same goals and use technology magic to make people’s lives better and easier.”
Speaking on stage at the event with the FT’s management editor Andrew Hill, James responded to previous criticism it has had in the media where the management hierarchy has been described as a “teetering top-heavy” structure.
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He said: “We were very determined this should not become a game of thrones; that we would reject intrigue. All the people in both teams on Carphone and Dixons sides are very nice, and that’s helpful because there are no unpleasant types jockeying for position. Fundamentally over a period of six to seven years you design a businesses which you want to live in, and that’s what we have done.”
James referred to the criticism at the time the merger was announced, quoting one particular article headline which read ‘two old fashioned businesses do not an Amazon make’.
“I think I replied at the time – quite right, we pay our taxes and make profits,” said James, adding that it has matched the e-retail giant in prices but that it believes “passionately” in the omnichannel retail experience, in which physical stores play a critical role especially for big-ticket items like TVs.
“If you’re blowing a month’s wages they want to go in store and see it for real,” he added.
Matching Amazon’s prices has also meant that it is less at risk of being used as a showroom, with people visiting the store to view big-ticket items, only to then leave and buy them cheaper online, according to James, who added: “if we weren’t the same price [as Amazon] we might be in trouble.”
Meanwhile deputy chief executive Andrew Harrison stated that both businesses have already proved they can adapt their business models to face new challenges, as they have reshaped to cope with the rise of internet shopping and Amazon.
“It’s not just new tech start-ups that can innovate. Both of us have been faced with some of the biggest challenges to our business models – the arrival of Amazon and the internet - and we have had to delve down into how to innovate; and how can we be the same price as Amazon. So it’s something that has been in the DNA of each business now – that restlessness to keep innovating,” he said.
Bother reiterated previous statements that one of the biggest ways they can differentiate in the face of other pureplay giants is via maintaining exemplary customer services.
Last month the companies revealed they are to target the internet of things market, which they have estimated to be worth £5bn.