Category Archives: Smart Technology

Service is at the heart of Dixons Carphone’s long-term ambitions

While positive short-term results may grab the headlines, the real story is how longer-term transformation positions Dixons Carphone for future success

Positive financials are the backdrop
Given the potential pricing and downward margin pressures of BREXIT, investors were pleased at the end of June with Dixons Carphone producing an enviable set of retail results. Much focus was on the impressive growth in profit before tax of 10%, to above £500 million, with 4% increase in like-for-like revenues.

The other bottom line from the CEO: “Customer relationships are everything”
While the top line numbers headline the financial achievement of Sebastian James and team, it is the long-term transformation plans of Dixons Carphone which capture the imagination, and forecast the pillars of future success. Sebastian James highlighted transformation strategies focused on building a long-term future for Dixons Carphone:

  • Channel agnostic
  • Service as core offer and differentiator
  • Transition from ownership to consumption
  • Lifetime value relationships

Personalisation for consumption + differentiate services = Lifetime Value
The commentary highlighted the transformation of how service is now a core offering, not just an attach to the sale of a product. Services such as warranty, maintenance, and repair are creating a predictable, profitable revenue stream and a deep ongoing relationship with consumers.

Whilst mobile and phones were highlighted as one of the most challenging categories due to the rise of SIM free phones, James’s commentary emphasised how there is an aggressive plan for both financing and leasing to increase phone replacement.

To differentiate service, Dixons Carphone will roll out same day phone repair services. Plans also indicate a breakthrough 7-day repair promise compared to 28-day market standard. These strategies not only differentiate Dixons Carphone, but create positive lifetime relationships beyond the sale of a handset. A NPS (Net Promoter Score) in the 90s is particularly noteworthy and evidence of positive customer response.

Last year Sebastian James pledged to increase service income from £500mn to £1 billion. We did not hear any specific numbers on the investor call on progress towards this goal. At £1bn, services revenue would represent 10% of today’s revenues, and would outstrip Best Buy currently at 7%. Clearly both national tech retailers are seeing a bright future in services both as a differentiator and profit stream to offset product margin pressures.

Dixons Carphone is well positioned to profit as the “Digital Plumber”
One of the most exciting and innovative long-term developments is Dixons Carphone’s journey to becoming the digital plumber of the nation in its joint venture with SSE, briefly referred to in the presentation. It is all about occupying a place of trust in people’s homes, making life easy for the customer through leveraging the Knowhow expertise of Dixons Carphone and supporting SSE’s 5 million smart-meter customers. If the two companies can make this work, they will have moved the point of sale from the store and the smartphone into the home, a new offline revolution for tech retail.

The store as destination for new technology
There is one area where Dixons Carphone is lagging the market, and that is making the store a destination for experiencing new technology. Given that Oculus Rift and HTC Vive were launched at the end of last year, not enough has been done to create experiences for customers. The price-point of Virtual Reality is evidently beyond the purse of most consumers, but customers are looking to retailers to take a lead in demonstrating this and other new technology such as smart home. We did note, however, that in next year’s plans Dixons Carphone will be introducing a new in store gaming proposition and look forward to seeing what they do for this growing category.

Positive short-term results complimented by strategy with promising trends
Beyond the top line numbers, reaching more than £1 billion in online electrical sales is a significant milestone. The projected 24% average annual growth in home delivery, and one day delivery coming in the next year, Dixons Carphone is strategically positioned i) to capitalise on one of the largest customer bases ii) to be more profitable than a pure play business, with the capability to leverage its personalised “My Account” approach iii) to sustain customer relationships that translate into profitable life time value.

by AS

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Filed under Connectivity, IT Distribution, Market Analysis, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs

A Take On Tech

Becky Connolly is an A-Level student who is doing work experience at CONTEXT. Given the recent survey results showing the passion of 18-24 year-olds for Smart Home products, we asked her to give her perspective on technology as a member of Generation Z.

Having come to my work experience at CONTEXT, I joined armed with nerves, excitement and my Mac. That’s right, I’m part of the BYOD generation (Bring Your Own Device), where we bring our beloved laptops, phones and tablets in fear of the unknown technology that may be lying ahead of us. Our Generation is famous for its insatiable appetite for the latest and greatest technology- the most popular connotations of Generation Z being a square-eyed teenager (often looking like a zombie) completely fixated by their devices; be it phone, laptop or television screen. But how does our perspective differ to that of older people, including millennials?

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Importance of technology
Technology has captivated our lives. I use technology in any way possible which will enhance features of my life in a few types and swipes which nowadays is becoming easier and easier.

Technology is not only used for social media, despite the heavy connotations (having said that, I am an avid Snapchat user). A large influence of technology is instilled in us from childhood, via the use of technology in classrooms; seeing as 77% of teachers use it for instruction as 81% of teachers believe that it can enrich classroom learning. Having adapted to technology through my education I have become not only more adept to technology but dependent on it for my studies; apps such as Quizlet and SimpleMind contained the sources of my revision for eight out of my ten GCSE subjects. Needless to say, technology was VERY important to me during this course.

An environment that appeals to younger generations
As the technology world blossoms, develops and shuttles into full speed, so do the minds of Generation Z. The answer is this; to attract the younger generation, the workplaces have to advance much further in an attempt to keep up with technology. If you have “dinosaur” computers which are inexplicably slow and missing out on features which are now just the “basics” paired with caveman wifi, the appeal (no matter how cool the job) will be gone, for example- if I were offered two jobs (and I liked both) and in one office there were state-of-the-art Macs and iPads dotted around everywhere, and the other used the same technology that Shakespeare used to write Macbeth, let’s just say I’d go for the former- wouldn’t you?

Furthermore, if your job entails a flair of creativity that initially could not be expressed through technology but now can be, it is essential for the young, talented recruits to have access to the advanced technology so that they can use it and develop their skills to the highest standard. Using the latest technology would also enable flexibility of the workplace. Technology-based work ensures that one can access their work in the office, at home or even abroad. This creates a sense of continuity for the worker and the company and assures that work is accessible from anywhere.

Technology investments worth making
Alongside many people of Generation Z, my prize possession is my phone; this is not uncommon, seeing as 88% of teenagers own phones, and 84% of them are smartphones. This shows that teenagers are willing to invest more in their technology for the better features. Right now, the favoured model is an iPhone; their perfect compatibility for the demands of Generation Z including social media, video streaming and education means that the price of £599 is often met and in high demand. It seems extortionate, but their dependability, fast-response and daily use make them a more worthy investment than a holiday, which would only last a few days.

As far as hopes are concerned, one cannot even begin to hope or imagine how far technology will develop over the years; if somebody told me that I’d be buying my latte via my thumbprint a few years ago… let’s just say technology is astonishing, awe-inspiring and unimaginable, really.

 

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Filed under Mobile technology, PCs, Retail, Smart Home, Smart Technology

The Facebook Generation are leading new technology adoption

I went on to Facebook in 2008 to check up what people could see about my aspiring 17-year-old daughter who wanted to be a doctor. That was when the deluge started –the year after I joined, Facebook went from 100 million to 300 million members. That same daughter is now 26, and is part of the millennial generation, who surprisingly, at first sight, are dropping behind the younger Generation Z in driving technology adoption. Continue reading

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SH&BA – Convergence of the transformation of our digital lifestyle

The SH&BA – Smart Home and Builders’ Association – Retailer & Manufacturer Panel met this past week in London. The attendees were truly a reflection of the convergence of the devices and technology in our homes and lifestyle. Participants represented a variety of industries and sectors including: manufacturing, vendors, retailers, associations, government agencies as well as academia and industry experts. What does such a diverse group of attendees gather to discuss?

Panorama

Smart Home – The hub of a digital lifestyle
IoT (internet of Things) devices have been in existence for a couple of decades. They enable connecting a variety of devices to the internet to send and receive data. That capability is not very exciting for most customers. But the ability to use IoT to monitor household utility connections to save money becomes a much more compelling reason for consumers to consider a “smart” home.

Many of the examples discussed in the SH&BA forum were about the increasing ease of use for consumers, and the value the smart devices play in making life convenient. Steve Moore from Dixons Carphone illustrated how their Honey Bee becomes a hub to connect many devices in the home. And even more importantly, it becomes the homeowners’ support centre where they can get answers to questions about devices they own. Steve Moore perhaps best summarised the key to Smart Home expansion by saying that we are at the stage where our “Goal is to take the friction out of life”.

Maybe we shouldn’t be calling it “Smart”
Rick Hartwig from the IET (Institute of Engineering and Technology) made the interesting point that we shouldn’t be using the term “Smart” home. Smart implies futuristic … a long way off. Mr. Hartwig argued that in many ways aspects of the digital “smart” home are already here. Most customers who are online already have at least one device beyond a PC connected to an internet. In the near future, energy and power consumption will be prime drivers for the home owner to adopt “smart” connected technology which adapts its settings to hours of the day in order to save energy.

The Power of Voice is rapidly accelerating adoption
One of the most exciting buzz factors in the smart home arena is the power of voice control. Initially propelled by Amazon Echo, Google Home, Apple and Microsoft are all rushing ahead with voice control speakers which become more humanised “hubs” for a variety of smart devices throughout the home.

Keynote speaker Theunis Scheepers brought some cutting edge examples from the evolution of the Amazon Alexa ecosystem. The speaker is the “human portal”, but the real genius is the Alexa cloud platform. The Alexa cloud is essentially an API system that enables partners to connect their devices to Alexa for voice control. In reality the Echo device is an array microphone and speaker – the “smart” is in the cloud that enables the customer to interact in a very natural way of using their voice to direct their digital lifestyle.

Theunis Scheepers

The Future of Smart Home
Adam Simon, from CONTEXT and Chair of the SH&BA Association, updated the group on the latest CONTEXT Smart Home Survey. The trends are clear, and consistently upward.   More consumers are aware of “smart home” and more plan to purchase a device for their home, but the patterns vary significantly by country.

From a consumer perspective, smart home adoption is still a “mid-term” play with purchases planned on 3 to 5 year horizon.   The exception is in the builder market where whole house adoption is accelerating because it is “built in” as the backbone of the home and constitutes a relatively small part of the overall home market.

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If there was one clear consensus and predictor for Smart Home it is that the power of voice will rapidly accelerate adoption. Amazon reported that Echo is now selling at 9X the holiday rate, and the Echo Dot is being bundled as a 6 pack so consumers can cover every room of their house. With the speaker hub and API cloud system we have now reached a stage similar to that of the smartphone with apps that make a connected life possible and convenient.

The next Retailer & Manufacturer Panel will be on 14th November, 2017.

For more information about SH&BA or if you are interested to attend the SH&BA panel please email marketing@shaba.eu

Guest blog by Chris Petersen, IMS

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Filed under Connectivity, Home automation, Mobile technology, Retail, Smart Home, Smart Technology

TCG Retail Summit – Top Themes for Future Retail Success

Guest blog by Chris Petersen, IMS

The TCG Summit represents a very unique gathering of top European Executives from across Europe. This year’s TCG summit, which was held at the end of March in Berlin, was particularly noteworthy in terms of the dominant recurring themes for future retail success, not only for technology, but all categories of retail. Even though the audience was primarily technology retailer and vendor leaders, innovations highlighted were less about the application of technology in the retail store, and much more about adapting to the most disruptive force in retail today – the omnichannel consumer.

Omnichannel is the New Normal
The underlying theme present in most of the presentations and panel discussions was omnichannel.   The TCG Summit in fact kicked off with Christophe Biget’s presentation focused on “innovation throughout the customer’s journey”.   From “walking in the customers shoes” to “customer centricity”, thought leaders were squarely focused on today’s consumer as a driving force of change in today’s retail.

If anyone had any doubts about omnichannel, it was key topic in almost every presentation and follow up panel discussion. The consensus in many discussions seemed to be that retailing is now moving beyond “omnichannel”.

“Experience is your product”
A top theme of both the presentations and panel discussions was focus on the customer experience as a key differentiator.   Jeffrey Sears from the Modernist group perhaps captured it best with his concept that “your [retailer] experience is your product”.   For traditional bricks and mortar retailers, the DNA now required is creating exceptional store experience as the new differentiator producing disruptive results. Despite all of the disruption from omnichannel, no one was predicting the demise of the retail store anytime soon. Many of the discussion panelists called out the need for new levels of partnership between vendors and retailers to “bring products to life”, particularly in stores.

Indeed, smart home products were frequently mentioned as the “poster child” for requiring hands on customer experience in store.   Smart home products are the growth category of the future that technology retailers are poised to lose … IF retailers don’t deliver an exceptional experience that connects products to the consumer’s life style.

Engagement – Yes we can!
The other underlying theme for future retail success is that retailers must develop internal DNA focused on customer engagement.   In the product centric past, it was enough to build stores, run ads and wait for consumers to come shop.   In today’s omnichannel world, consumers are very proactive and in control of their journey.   To be successful, retailers must focus on innovative ways to move from a passive display to proactive ways to engage customers where they are and how they want to purchase.

Perhaps the highlight presentation of the TCG 2017 Summit was from Nilesh Khalkho, CEO of Sharaf DG. Khalkho provided an amazing visual journey of Sharaf DG’s mantra of “Growing through Differentiation” in an omnichannel environment.   This journey included numerous examples of how retailers, especially technology retailers, will survive and prosper by truly differentiating on customer experience, engagement, and service.   The Sharaf DG story was a highlight that became a “Yes we Can!” rallying cry for what is possible in transforming technology retailing.

The Bottom Line – Results still Count
It is one thing for an executive team to say they are transforming to omnichannel, it is quite another to be able to execute omni-presence, experience and service 24/7/365.   There were a number of speakers and commentaries on the tremendous investments required to be able to create the experience and engagement demanded by today’s consumers.ETCG-Flashback-2017-43-2

As Adam Simon from CONTEXT highlighted, investors in tech retail are still looking for a return on their investment.   But achieving that return will require more than fiscal, operational expertise.   The successes, and the future of technology retail will require innovation on how to leverage talent in new ways that generate connected, customer relationships based upon a differentiated customer experience.

The bottom line for the future retail success – future success will not depend upon the sales transactions made today, but rather upon the customer relationships earned through engagement and services that will generate customer lifetime value.

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Filed under Connectivity, Home automation, IoT, Market Analysis, Mobile technology, Retail, Retail in CONTEXT, Smart Technology

CeBIT 2017 Points the Way to VR and Smart Device Growth

With 200,000 participants flocking to Hanover this year, the week-long CeBIT show can be an intimidating prospect. Over 3,000 exhibitors set up shop at the world’s biggest technology expo. And while this is not a show for big name product launches, it still provides a very useful snapshot of what’s hot in the tech industry from one year to the next.

This year, as we predicted, there was plenty of buzz around smart devices, the Internet of Things and Virtual Reality (VR)/ Augmented Reality (AR). These, after all, will be the technologies that in years to come delight consumers and power the next generation of European businesses.

VR/AR catches the eye
CeBIT 2017 had a bigger focus on VR/AR than ever before, highlighting the growing maturity of this burgeoning technology. If you were in any doubt of the scale of interest in this space, half of Hall 17 – one of the show’s aircraft hangar-sized expo spaces – was devoted entirely to firms exhibiting VR-related tech. As we predicted at the end of 2016, gaming will continue to drive forward interest in VR on the consumer side. But, as evidenced by its exposure at the business-centric CeBIT show, more and more companies are exploring corporate applications.

Examples included the “Virtofy” VR presentation system, which offers companies an opportunity to demo products and showcase projects to prospective clients/customers. Another interesting use case developed by engineers at the Zwickau University of Applied Sciences incorporates integrated data goggles into the helmets worn by steel workers – designed to flash up safety warnings and the like.

In Hall 2 Intel, in cooperation with Microsoft, presented the dataflow the companies expect in the near future. Based on the BMW i8, Intel presented with the Microsoft AR Hololens how cameras and sensors scan the environment of a future car in order to drive autonomously. Intel predicts that approximately 4000 GB of data will be tracked, processed and uploaded from cars in the future, which creates brand new business scenarios in this market.

IoT everywhere
As we mentioned in December, the Smart Home market is really heating up, with Apple, Google, Amazon, Samsung and Microsoft set to battle it out for hearts and minds in 2017 and beyond. True to form, the Internet of Things formed a major part of CeBIT 2017, with over 270 exhibitors from 29 countries participating. The IoT also had its own spin-off summit at the conference – a first for the organisers and again illustrative of the growing interest in smart products.

The IoT, of course, extends far beyond the smart home. In fact, attendees were treated to demos of everything from smart shirts and dog collars from Telefonica Deutschland, to Toshiba’s industrial applications for the energy sector.

Drones are taking off
The smart device revolution also increasingly extends up into the sky. As evidenced by the buzz at CeBIT, drones are fast carving out an IoT niche of their own. A large outdoor area sponsored by Intel drew many of the crowds, with much attention drawn to the bright orange H520 hexacopter from Chinese firm Yuneec. When combined with an on-board camera and Intel RealSense tech, it’s able to detect movements and distances like the human eye – enabling it to avoid obstacles in flight.

The Drone Park even drew the interest of German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe.

by AD

 

 

 

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Filed under Connectivity, gaming, Home automation, IoT, Mobile technology, Retail, Smart Home, Smart Technology, virtual reality, Wearables

How PC Gaming Is Driving AI, Cars, and the UK Treasury’s Technology Policy

At CES 2017 back in January, Jen-Hsun Huang, CEO of Nvidia announced that “GPU-powered deep learning is driving the ability for computers to perceive the world… But one day, AI researchers met the GPU and the big bang of AI occurred.” Up until more recently, when most ICT analysts thought of Nvidia, the first thing to come to mind would have been gaming, and for a good reason. The core of Nvidia’s business is still PC Gaming where they continue to dominate the GFX hardware market. Jen-Hsun went on to explain that the “GPU had the benefit of being fuelled by the largest entertainment industry in the world, video games.” Indeed, PC gaming is one of the most processing-intensive activities a PC can be asked to perform, and that industry has gone from strength to strength over the past few years. Jen-Hsun was right to tout the success of PC gaming: CONTEXT’s data shows that sales of high-end VR-ready PCs shot up 1057% in terms of revenue y/y for the top 6 EU economies in Q4 2016, and figures from the Entertainment Retailers Association put gaming as contributing more to the UK economy in 2016 than either music or video sales at £2.96bn.

Several thousand miles away from Sin City, the importance of AI and driverless cars was being carefully noted by strategists and civil servants in Whitehall, culminating in the most recent budget announcement. The British government has promised £270m in funding for disruptive technologies such as driverless cars, AI, and robotics. Given the current hard-Brexit policies being pursued by Teresa May’s administration they are wise to support such green shoots; CONTEXT’s figures for professional GPUs back both this decision and Jen-Hsun’s assertion. Screen Shot 2017-03-16 at 13.21.25Sales of professional GPUs in the UK reversed a previous decline in Q3 2016, with Nvidia’s own Quadro series of GFX cards enjoying +25% y/y growth in revenue. More and more GPUs are being purchased to power deep learning and AI for large datacentres, rather than in their more traditional roles for 3D modelling and computer aided design.

It’s not uncommon for devices to be developed with one purpose in mind then being very successfully appropriated for another. Even Atari’s failed Jaguar gaming console ended up being cannibalised and used in dental equipment. The GPU is also the critical lynchpin of another emerging technology: Virtual Reality. In one profound statement, Jen-Hsun declared that “…all gaming was Virtual Reality,” and in many cases this rings true where a player inhabits a virtual world. It might not seem immediately obvious, but components built for PC gaming now power both AI and VR. As a result Nvidia’s share price has soared in recent months, finishing 2016 +224% up from the previous year, and promising to continue to rise as their partnerships and new ventures bear fruit, with professional visualization growing +11%, datacentre at +144% and automotive up +52% for Q4 2016.

This success eventually caused Nvidia’s shares to drop in February when the Q4 results were released as investors weighed up the risks of long-term returns (as driverless cars are still many years away from being commonplace), versus selling stock at an apex. To some extent, the UK government is taking a gamble on driverless cars becoming the norm, and this might reflect the modest £270 sum compared with much higher investment promised by other governments. Academic commentators have also welcomed this news due to the environmental benefits promised by AI-driven vehicles. The immediate future of AI and its importance to the UK economy is very encouraging, but much like Brexit, the longer-term outlook is beyond the most complex algorithm to accurately portend.

by JW

 

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