Big interview: Dixons eCommerce director Jeremy Fennell

August saw summer finally arrive in the UK with some glorious weather, which more than made up for a dank and drizzly first half of the year. And for the nation's largest electricals specialist Dixons Retail, it was also a month when its business began to heat up.

Having launched an innovative new concept store in Gatwick Airport's South Terminal (pictured below) early in the month, the PC World and Currys owner then became the first UK retailer of its type to unveil a same-day delivery service, with customers now able to order before 10am and receive the goods before the evening is out.

Since then, a brand new store with a digital focus and fresh new merchandising methods has opened in Heathrow's Terminal 5.

The man leading these initiatives at Dixons is eCommerce director and managing director of travel, Jeremy Fennell, who during two years in the multichannel hot-seat has overseen some rapid changes in the business.

Explaining the process behind the new fulfilment options, which were 12 to 18 months in the planning, he tells Essential Retail: "All retailers obsess about product availability, but in a multichannel world we need to take delivery availability just as seriously.

"We know by the number of people interested in online orders and collect in-store options that there is a matter of immediacy when customers finally decide what they want to buy.

"We also know that 80% of our in-store customers have already been online, but the journey once the customer has decided what they would like to buy is all about 'when can I have it?'."

Interestingly, the new 10am cut-off time for deliveries has had the most impact on night-time orders. Fennell says that people can now "shop throughout the night", and online sales conversions for customers wanting immediate delivery can now be made during the particularly busy after-work period.

In terms of the new airport stores, Fennell and his team have been experimenting with flexible point of sale terminals, greater digital signage and a different type of merchandising that pushes relevant products for a travel-focused audience. Fennell is keen that what is learnt in these outlets can be filtered to the wider business in time, as the property portfolio continues to shrink and become more of an interactive space in-keeping with modern retailing requirements.

"We'll use the Gatwick store to try new things, and we're already looking at plans to put the KnowHow bar into other travel formats – it's been very successful in all areas and we’ll be looking to add this where space allows," the eCommerce boss states.

"You'll also see more of the open merchandising of high volume products, while the tablet merchandising and digital displays will continue to be trialled. We'll see how these go before making a decision whether to roll them out to the rest of our new format stores and to the main chain."

Looking after both the travel business and eCommerce operations is particular apt in the current retail environment; it truly is a multichannel role for Fennell, who himself jokes that if he does his job properly he won’t have one in six to 12 months' time.

He says: "Why do you need an eCommerce director if you are a proper multichannel retailer? The reason for having one is because we come from a world when eCommerce and stores were very separate.

"There comes a point where you don’t need a specific eCommerce team any more, as the business becomes multichannel. I don’t think we're far away from that – I think that most retailers which are as far advanced as we are in this field are starting to think that way."

Of course, this doesn't mean that the department is months away from closure, but his comments describe the direction of the wider retail world. Businesses need to ensure that all their divisions are connected, digitalised and working in unison to serve the customer in the best possible way. With so much departmental crossover, employees require an array of skills whatever area of the company they operate in.

"My job over the last two years has been to push the eCommerce and multichannel agenda to the rest of the business, educate the rest of the business and put processes into place with the rest of the business that make us multichannel," Fennell asserts.

"I have a very strong team in my multichannel organisation but I've also got a retail team that better understands and is able to utilise the available multichannel analytics, data and marketing information."

Dixons will release an interim trading update on Thursday 5 September, which comes eight weeks after the retailer announced a 7% increase in like-for-like sales and 39% growth in profit for its UK and Ireland business in the year to 30 April. The business, which clearly benefited from the collapse of main market rival Comet, also grew its multichannel sales in 2012, with sales in the last six months of the financial year up 25%.

Like most retailers in the UK, online growth is outpacing other departments at Dixons, with multichannel sales now accounting for 17% of total business in the UK. The company expects this to be in excess of 20% in the next couple of years.

"It's no secret that we’ll continue to reduce the footprint of our retail estate, and therefore you can expect multichannel sales to become a greater part of the business," Fennell notes.

"In all honesty I don’t know where it will all end up. All you can do is follow customer trends and make your proposition as clear and attractive as possible."

So from a company which had its very future questioned by certain analysts only a few years ago, Dixons is slowly and surely putting the building blocks in place for the next generation of retailing. It admits it was some way behind other retailers in terms of offering mobile commerce, but when it arrived on the scene it did so with responsive design that allows for consistent experience across mobile, PC and tablet device.

Just as it did by launching a strategic overhaul in preparation for the arrival of US electricals giant Best Buy in the UK in 2010, which ended in failure for its transatlantic rival on these shores, Dixons is aiming to keep one step ahead of the competition in all areas.

"Before our new fulfilment options were launched, we knew we had a strong advantage with a good delivery network, reserve & collect and pay & collect – the only gap for the future was same-day delivery," Fennell explains.

"No-one [in our market] was offering it but our expectation was that the market would get there soon and we didn't want to get caught short. As it happens we got there first, so it becomes an advantage for us."

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