‘Dick Smith Stores Face Closure’ – Why I’m not surprised

BACK IN ITS glory days, Dick Smith was a haven for the geek. This was even before computer geekery was commonplace, but there were always serious young chaps with horn-rimmed spectacles who got all worked up about the nuts and bolts of DIY electronics.
The Australian-owned company was never going to rule the world, but it had its niche; one that would only be challenged in time by el cheapo rival Jaycar.
Somewhere along the way, Dick Smith seems to have had a brainwave. Either that, or Woolworths’ offer to buy him out was just too good to resist.
With all manner of gadgetry moving from the geek to the domain of the average consumer, it must have also seemed like the right time to expand and diversify into this seemingly profitable sector.
Obviously, things haven’t panned out the way Woolworths wanted it to, and the giant Australasian supermarket chain is planning to sell its interest in Dick Smith. But before it does so, it will be making the planned cull of “underperforming” stores. No information has come to light yet on how many of the 71 NZ Dick Smith stores – 19 of which are in Auckland – will be for the chopping board.
Meanwhile, old Mr Smith has gone on the rampage, threatening to cause all kinds of trouble if Woolworths sell Dick Smith to foreign interests.
I’m no expert in the business of business, but it doesn’t take a genius to understand at least some of the reasons the Dick Smith stores are in trouble.
To start with, it’s clear that there aren’t as many serious young men who like splicing wires together with soldering irons (or whatever) as there used to be. DIY was, and remains, very niche. So much so that it’s hard to see the need for a Dick Smith store in just about every shopping centre. It’s sad that what was once Dick Smith’s core has melted away, but I guess that’s what happens when the electronics scene goes hog-wild. I mean, back in the ’80s, electronic devices were expensive and thin on the ground. By contrast, in 2012, who would want to make a gadget that they could buy from the $2 shop?

The Dick Smith stores should, therefore, be capitalising on the profusion of cool gadgets that has invaded the market in the past decade, and making a right old bundle. But these cool gadgets aren’t exclusive to Dick Smith: they’re also available from those other mega-retailers who saw an opportunity in electronics, including Harvey Norman, which one suspects sells most of the gear that Dick Smith wishes it could. The thing is, Hardly Normal (as it is not-so-affectionately known in the trade) is an aggressive company with immense buying power, competitive pricing and the floor space to stock a much, much wider variety of doo-dads than Dick Smith.
So that’s one problem for Mr Smith. Here’s another: famously poor service. Somehow, in the transition from its place in electronic geekdom to consumer gadget dispenser, it lost sight of what it needed from its staff. I’ve lost count of the times I’ve encountered appalling service at Dick Smith, and alarmingly, it’s endemic to the stores throughout the country. Which isn’t to say that I haven’t occasionally had an excellent service experience, but it’s rare. More often, you’re likely to find Dick Smith employees chatting amongst themselves and ignoring the inevitable questions their customers need answered. On occasions when I have forced myself on unsuspecting staff (so to speak) I’ve encountered everything from downright rudeness to irrelevant and sometimes wrong-headed sales pitches for gear that won’t do the job I need it to, to “we know it all and you, the customer, are merely putty in our hands” snobbism. Often, I’ve actually had money to spend, but have still walked out empty-handed. Gone are the days, then, when Dick Smith was staffed with people who were just like its customers: electronics nerds with a genuine enthusiasm for their jobs.
Woolworths doesn’t seem to have known how to capitalise on the strengths of the Dick Smith brand, either. Last year, when the Amazon Kindle was finally made available in NZ and old Dick could have had an exclusive on the marvellous wee e-reader, instead they polluted the scenario by cross-promoting Kindle through both Dick Smith and its Countdown supermarkets! Worse still, they marketed the previous-generation of Amazon Kindle as a special deal (it wasn’t) a mere few weeks before introducing the very latest version of the gadget, at an even better price. I’m surprised that my colleagues in the tech media sphere haven’t soundly berated Woolworths for this callous lack of customer respect.
One last point: If a store doesn’t really know what it is, then it’s impossible to create the kind of branding that will sell it. Dick Smith has tried doing a little bit of everything, but who in their right mind wants to buy DVDs or games from an outlet with such a poor selection? Similarly, who would buy a television panel from an outlet with so few brands on display, when they can walk a few metres and take in a vast range of HD wonderment at somewhere like JBs. The branding in recent years has been confused, to say the least. First we had that ineffectual and quite hilarious line: “Dick Smith Electronics – That’s where you go”. But at least they still had Dick’s craggy face on a distinctive yellow and black background. Then they changed their line to “Talk to the Techxperts”, which might have sounded modern in 1980, but seems anachronistic in 2012. And oddly (possibly because JBs’ branding is all bright yellows) they opted for a plain black logo and store branding, giving it a slightly depressed, monochrome vibe that makes the store very easy not to notice.
In short, I’m sure that Dick Smith still does some things right. I’ve bought the odd thing from them. But it’s really, really easy to see what they’ve done wrong, and most of it wouldn’t be too hard to put to rights.
But then again, perhaps it’s just too late in the day. GARY STEEL