Dixons is to lose its high street presence after nearly 70 years with the rebranding of its 190 outlets as 'Currys.digital' by June. The Dixons brand will become an online-only operation. This rebranding exercise does nothing to change the economics of electricals retailing on the high street and could even hasten its decline.
The death of Dixons has been a long time coming as large out-of-town stores with low rents have become the format of choice for elecricals specialists. DSG International chief executive, John Clare, claimed many customers would feel nostalgic about the passing of the brand, which will continue to exist, albeit as an internet-only concern.
The move has been judged by Mr Clare to be the right move for the group, which sells home electronics, arguing that it will save costs. By rebranding the stores as Currys.digital outlets, parent group DSG clearly hopes that they will benefit from the association with Currys and from a direct link with digital technologies. But there are doubts about both ambitions.
Verdict research shows that Dixons and Currys' customers display identical levels of loyalty - 77.6% of them express satisfaction with their respective retailers - so it is unclear how the use of the Currys name will lift store performance. Branding them .digital may seem very 21st century, but unless there are fundamental changes to make them better at selling digital products, this initiative is unlikely to have much impact.
Dixons already focuses on cameras and audio-visual goods but paradoxically that focus will be diluted by repositioning as the broader Currys' range is introduced. Dixons stores do not sell white goods at present because of the limited space available in-store; the rebranding exercise will do nothing to make them more suitable.
More puzzling is the elevation of Dixons to an online brand. If DSG believes the Dixons brand is an albatross around its neck and that Currys is the brand with a future, why make Dixons an online brand?
Certainly the company is right to expand its online operations to become a true multichannel retailer that can better compete against online only electricals specialists like Empire Direct, but a single brand encompassing online and store operations is surely a better option. The new strategy is more likely to confuse customers.